Shares of Reliance Industries Limited (RIL) have witnessed a significant decline in market capitalization (m-cap) since the demerger of its financial services business into Reliance Strategic Investments (to be renamed as Jio Financial Services or JFS). The decline in m-cap reflects a decrease in the overall market value of the company’s outstanding shares.
As of July 19, RIL commanded a market capitalization of Rs 19,21,575 crore. However, following the corporate action of demerger, the m-cap dropped to Rs 17,72,585 crore on the day of the action (Thursday). Further, on Monday, the m-cap stood at Rs 16,74,658 crore, indicating a total m-cap loss of roughly Rs 98,000 crore in the two sessions.
The decline in RIL’s stock price continued on Monday, falling 2.62 per cent to hit a low of Rs 2,469.55 on the Bombay Stock Exchange (BSE). This came after a 3.19 per cent drop in the previous session. The decline in the stock price can be attributed, in part, to the release of the company’s Q1 results, which may have impacted investor sentiment.
As per analysts’ assessments, the listing process for Jio Financial Services (JFS) is expected to take around two to three months. While there is no concrete listing date as of now, the timeline for the listing and a detailed strategy for the new entity may be provided by Reliance Industries Limited (RIL) at its upcoming annual general meeting (AGM) in the coming weeks.
Nomura India, a brokerage firm, anticipates that RIL will outline the timeline for JFS’s listing and present a comprehensive strategy for the newly created entity during the AGM.
Axis Securities, another brokerage firm, also sees JFS getting listed within the next 2-3 months.
Nuvama Institutional Equities is more optimistic and suggests that the listing process for JFS, being carved out from one of the largest conglomerates, might be fast-tracked. The brokerage expects JFS to be listed in a month’s time or even earlier, as the process is likely to be expedited given the significance of the entity and the interest of investors.
