Jio Financial shares hit lower circuit on listing day; know share price, symbol, valuation, capital gains tax, and more
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Designed by: Manoj Kumar
Shares of Jio Financial Services (JFS), the demerged financial business of Reliance Industries, got listed at Rs 262 apiece on NSE, while the price on the BSE stood at Rs 265, marginally higher than their discovered price of Rs 261.85 on July 20. Around 10:30 am, the stock hit 5% lower circuit and was trading at Rs 248.90 on NSE.
Jio Financial share
price today
At the time of listing, JFS commanded a market capitalisation (m-cap) of Rs 1.66 lakh crore on NSE. It fell to around Rs 1.58 lakh crore intraday. The symbol for Jio Financial Services stock is JIOFIN.
JFS m-cap, symbol
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Jio Financial Services stock will be in the trade-to-trade segment for the next 10 sessions. JFS shares were credited to eligible shareholders of Reliance Industries (RIL) last week in the 1:1 ratio. As part of the demerger, RIL shareholders have received one share of Jio Financial Services for holding one share of Reliance.
JFS shareholders
Before the demerger, the company apportioned 95.32% as RIL's cost of acquisition and 4.68% for Jio Financial Services. This will help investors calculate their capital gains tax at the time of sale of shares. This means an investor who bought RIL shares on July 19, a day before the demerger, is deemed to have paid Rs 133 (4.68% of RIL's closing price of Rs 2,853) for Jio Financial Services.
JFS capital gains tax calculation
Jio Financial Services is the 51st stock on Nifty 50 and 31st on the Sensex index. The stock will be removed from both indices after the end of the day on the third day of its listing. So, the exclusion will basically happen on August 24. The exclusion date would, however, be deferred in certain scenarios. Meanwhile, JFS is set to be delisted from FTSE Indices, marked at zero value, on August 21, while MSCI Index will uphold JFS shares.
Removal of JFS from indices
Nifty 50 index passive trackers can sell around 9 crore JFS shares and Sensex index trackers can sell 5.5 crore shares, as per Nuvama Alternative & Quant Research. Brokerage CLSA noted that other than a stake in RIL, liquids worth $2.5 billion or Rs 33 a piece have been demerged into JFS. This can support a loan book of $13-15 billion, CLSA said.
Support for JFS loan book
CLSA noted that even at the speed of the recent annual loan book additions of sector leader Bajaj Finance, Jio Financial Services will take nearly three years to fully use up the amount. Most lending financials trade below 3 times price to book ratio, except Bajaj Finance and Chola, which have return ratios of over 20%. This, CLSA said, will need a PAT of over $500 million for core JFS.
JFS vs peers
A large core book reduces the need for JFS to sell its stake in Reliance Industries in the near term, CLSA said. The demerged financial services arm would unlock value for RIL shareholders and "give them an opportunity to be a part of a new growth platform," RIL recently said in its annual report.
Value unlocking for RIL
According to foreign broking firm Jefferies, JFS has a net worth of Rs 28,000 crore. This includes 6.1% stake in Reliance Industries, which is a result of transfer of treasury shares from the parent. Excluding the cost of that stake, the core net worth of the company may be about Rs 14,000 crore.
JFS net worth
The Street is now keenly eyeing the JFS business model. While the company has already announced a 50:50 joint venture with Blackstone to enter the asset management industry, its lending business strategy is still under wraps. Most analysts believe that JFS will target the merchant loan space as RIL has a wide reach in kirana stores.
JFS business model
Jio Financial Services is positioned uniquely to capture the growth opportunities in the financial services sector and plays a crucial role in transforming the digital finance landscape in India, said Reliance Industries Chairman and Managing Director Mukesh Ambani in his message to shareholders in the company's 2022-23 annual report.
Mukesh Ambani on JFS
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