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Jio Financial (JFS) share price falls over 3% ahead of exclusion from Nifty, other NSE indices; passive selling worth $324 million likely; check details

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Shares of Jio Financial Services (JFS) fell on Wednesday as the stock will be excluded from Nifty and other NSE indices, on September 7 (Thursday). JFS share price fell nearly 3% to hit an intraday low of Rs 247 apiece on the NSE. 

JFS share price today

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Jio Financial Services Ltd (JFSL), the demerged non-banking financial services unit of Mukesh Ambani-led Reliance Industries, will be dropped from Nifty 50 and other NSE indices tomorrow (September 7), the stock exchange NSE said on Tuesday.

Jio Financial to exit Nifty50

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JFSL shares will be dropped from 19 NSE indices, including Nifty 50, Nifty 100, Nifty 200, Nifty 500, Nifty Energy, Nifty Commodities and Nifty Oil & Gas. Meanwhile, BSE indices had last week removed Jio Financial Services shares, while MSCI and FTSE continue to include the stock in their indices.

JFS' exclusion from
NSE indices

With the removal of JFSL shares from NSE Indices, passive funds tracking those indices will have to adjust their portfolios. The adjustment is scheduled for September 6 in the final 30 minutes of trading. As per Nuvama Alternative Research's calculations, passive selling is anticipated to reach nearly 105 million shares, amounting to $324 million.

Passive selling post JFS removal

Earlier, the stock exchanges had increased the price band for the Jio Financial shares to 20% from 5% effective from Monday (September 4.) With the revised 20% price band, the exclusion process of JFS should proceed without significant hiccups, said Abhilash Pagaria of Nuvama Alternative & Quantitative Research.

JFS exclusion to be smooth

Jio Financial was a constituent of indices such as Nifty 100, Nifty 200, Nifty 500, Nifty Commodities, Nifty Energy, and Nifty Infrastructure, among others. NSE indices had announced inclusion of Jio Financial (spun-off entity) on account of demerger of financial services business from Reliance Industries Ltd (RIL). The stock got listed at Rs 265 apiece on August 21, a 1.18% premium over its discovered price of Rs 261.85 apiece on July 20.

JFS listing 

According to Nuvama Alternative's calculations, Jio Financial Services (JFS) is expected to join the AMFI Large-cap category in the January 2024 list, with effect starting in February 2024. This won't lead to any immediate flow changes; instead, it's a list used by active fund managers.

JFS to join AMFI large cap category?

At RIL's 46th annual general meeting (AGM), Chairman and Managing Director Mukesh Ambani called Jio Financial as the fourth growth engine. He said the company's products would not just compete with current industry benchmarks but also explore path-breaking features such as blockchain-based platforms and CBDC.

JFS outlook

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