On Friday, Reliance Industries announced the delisting of its financial services division into another company and the subsequent listing of the new company on the stock exchange. The financial services division of Reliance Strategic Investments will be spun off and the new company, Jio Financial Services, will take its place.
Jio Financial Services would issue one share to each shareholder of RIL
At Rs 1,387 crore or 0.3% of RIL’s overall revenue, the financial services arm’s revenue stood as of March 31, 2022. No cash will be exchanged in the split; instead, shares will be traded, according to a statement from RIL. For every RIL share they hold, shareholders will receive one Jio Financial Services share.
The financial services business component, Reliance Industrial Investments and Holdings Ltd., which is owned by RIL, would be transferred to Jio Financial Services. In order to create sufficient regulatory capital to lend to individuals and businesses, Jio Financial Services will purchase liquid assets. For at least the next three years of business operations, the capital cushion will also help incubate additional financial services sectors such as insurance, payments, digital brokerage and asset management.
In accordance with the RIL, crucial companies have the necessary regulatory authorizations. Jio Financial Services intends to introduce a consumer and merchant lending company to complement and add to the usual credit agency-based underwriting. In the insurance, asset management and digital brokerage divisions, he will continue to assess organic development, joint ventures, as well as inorganic prospects. Jio Financial also wants to enable shareholders to use the system for fully digital financial services. RIL omitted a completion date for the planned split because it needs legal and administrative clearances.