Jio Financial demerger: RIL fixes July 20 as record date

Reliance Industries Ltd (RIL) Reliance Industries Ltd. on Saturday said it has fixed July 20, 2023, as the record date for the demerger of Reliance Strategic Investments Ltd., the financial services arm of the company. RIL rename the new entity as Jio Financial Services Limited (JFSL).

Besides, on July 20, the conglomerate will determine the equity shareholders of the company entitled to receive the resulting company's new equity shares of Reliance Strategic Investments Limited (RSIL).

This March, Mukesh Ambani-led RIL said it plans to demerge its financial services undertaking into Reliance Strategic Investments Limited (RSIL) and rename and list it as Jio Financial Services Limited (JFSL). RSIL also announced that Hitesh Kumar Sethi will head the new entity as MD and CEO.

In its regulatory filing, RIL said that the effective date of the scheme is July 1, 2023.

Under the scheme, Reliance Strategic Investments will allot one fully paid-up equity share of RSIL of face value of Rs 10 each, for every one share of Reliance Industries as of the record date. RSIL will then be renamed as Jio Financial Services (JFSL).

In a regulator filing on Saturday, RIL said: "In accordance with provisions of the scheme, Reliance Strategic Investments Limited (“RSIL”) shall issue and allot 1 (One) fully paid-up equity share of RSIL having face value of Rs 10 (Rupees Ten) each for every 1 (One) fully paid-up equity share of Rs 10 (Rupees Ten) each of the Company (“Resulting Company New Equity Shares”) to the shareholders of the Company whose names are recorded in the register of members and / or records of the depository as on the Record Date."

It said that the shareholders of the company holding equity shares in physical form are requested to send a letter to the Registrar and Transfer Agent of the Company (, Kfin Technologies) (“KfinTech") containing details like name, address, email ID, PAN, contact number, and details of Demat account among others through email, post, speed post, courier, or hand delivery to reach to the KfinTech no later than five working days before the Record Date (i.e., on or before Friday, July 14, 2023) to enable RSIL to issue the Resulting Company New Equity Share(s) in dematerialised form.

On Saturday, RSIL announced that the board of directors has approved the appointment of Hitesh Kumar Sethia as the Managing Director and Chief Executive Officer of RSlL for a period of 3 years. The appointment now needs the approval of members of the company, RBI, and other approvals that are required.

Sethia has been designated as President and CEO of RSlL to hold such office till the effective date of his appointment as director, it said.

The RSIL board also approved the appointment of Rajiv Mehrishi, Sunil Mehta, and Bimal Manu Tanna as additional directors for a term of five years, up to July 6, 2028.

The board has recommended appointing Mukesh Ambani's daughter Isha Ambani and Anshuman Thakur as non-executive directors.

Lodha & Co, Chartered Accountants will be the Joint Statutory Auditor of RSlL to hold office as such from the conclusion of the 25th annual general meeting till the conclusion of the 28th annual general meeting of RSIL.

Besides, Bafasubrrnanian Chandrasekaran has stepped down as the independent director from the board of directors of the company with effect from July 7, 2023.

On Thursday, RIL, in a regulatory filing, said it is taking necessary steps, including fixing the record date for allotment and listing of equity shares of Reliance Strategic Investments Limited (RSIL) on stock exchanges.

In a brief note to exchanges, RIL said: "The company and Reliance Strategic Investments Limited will take necessary steps including fixing the record date for allotment and listing of equity shares of Reliance Strategic Investments Limited," it said.

The announcement came as National Company Law Tribunal (NCLT) gave its nod to the demerger of the company's financial services undertaking and its listing.

On Thursday, the conglomerate said that the company will now take necessary steps for the demerger. "The company and Reliance Strategic Investments Limited will take necessary steps including fixing the record date for allotment and listing of equity shares of Reliance Strategic Investments Limited," said Reliance.

Last week, the Securities and Exchange Board of India imposed a penalty of Rs 7 lakh on Reliance Strategic Investments Limited for Nifty futures & options trade manipulation.

After the demerger, JFSL will acquire liquid assets to provide adequate regulatory capital for lending to consumers, merchants, etc., and incubate other financial services verticals such as insurance, payments, digital broking, and asset management for at least the next 3 years of business operations.

JFSL and its subsidiaries will leverage the technology capability of Reliance and focus on the digital delivery of financial products to democratise financial services access for 1.4 billion Indians.

According to brokerage BofA Securities, by separating financial services from the core business, Reliance appears to be keeping arm's length transaction from other entities, and in theory helping them better to attract strategic or JV partners who are keen only on financial services arm - like what they did with Reliance Jio or tower InvIT.

Deven Choksey, MD, KRChoksey Holdings Pvt. Ltd, told ET that Jio Financial has a market ready to approach them for generating business. He said it will be a good value addition for the Reliance Group shareholders as the current shareholders will get Jio Financial Service for free before the record date. The shareholders will get stocks of Jio Financial in their demat after the record date. 

On Friday, RIL's share price closed at Rs 2635.45 apiece.

The company is estimated to have an underlying net worth of about Rs 1,50,000 crore, of which there are about Rs 1,10,000 crore worth of shares of Reliance Industries. The balance is in the form of the real net worth. In comparison, Bajaj Finance, which is the largest retail NBFC at present, has about Rs 44,000 crore of net worth.

(With PTI inputs)