Why Jio Financial Services shares are hitting lower circuit everyday; Deepak Shenoy explains
₹213.45 apiece on the BSE with a market capitalization of ₹1.35 lakh crore. On BSE, Jio Financial Services shares were locked at ₹215.90 apiece.
Jio Financial Services Ltd (JFSL), was demerged from Reliance Industries and it made a stock market debut on August 21 with the shares listing at ₹265 apiece on the BSE and ₹262 per share on the NSE as compared to its discovered price of ₹261.85 apiece. Also Read: Jio Financial Services Listing Highlights: JFSL shares close at 5% lower circuit at ₹251.75 apiece on listing day However, JFSL shares have plunged for the fourth consecutive session Thursday on persistent selling from institutions who have to exit from the stock before it is removed from the indices.
Deepak Shenoy, Founder and CEO of Capitalmind explained that index funds need to force sell JFSL shares worth roughly around ₹2,700 crore before the stock is removed from the indices. JFSL shares were to be excluded from Nifty and Senex on August 23, but with the heavy beating and the stock hitting lower circuit limits consistently, the exclusion has been extended to August 28.
In a post on social media platform X, formerly Twitter, Shenoy noted that the total asset under management (AUM) index funds that track Nifty50 index is around ₹2,70,000 crore “In the Nifty is Reliance Industries at a weightage of about 10%. It used to be 11%, but then JIOFIN was demerged out of it, and effectively, 1% of the NIFTY is in JIOFIN," Shenoy wrote.
Meanwhile, the index funds which received JFSL shares upon demerger, will now be forced to sell JFSL shares before it gets removed from the index. Also Read: PVR Inox share price jumps 26% in 3 months on solid show by Gadar 2, Jailer, Pathaan; more upside left? “Why is JIOFIN falling? Because
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