LIC made a big bet, bought 6.66% stake in Jio Financial Services, stock fell 12.45 percent
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Life Insurance Corporation of India (L.I.C.) has played a big role in the market. The insurance company has acquired 6.66 per cent stake in Jio Financial Services Limited (JFSL), the financial services arm spun off from Mukesh Ambani-led Reliance Group. LIC said in the information given to the stock market that the company has acquired 6.660 percent shareholding in Jio Financial Services Limited, separated from Reliance Industries. The share of Jio Financial Services Limited (JFSL) was listed on the markets on Monday. The market capitalization of the financial services company remained close to Rs 1.60 lakh crore.
Shares fell 12 percent in early trade after listing
Shares of Jio Financial Services Limited (JFSL), a financial services unit separated from Reliance Industries, fell nearly five per cent on the first day of listing in the markets on Monday. Whereas, by 1.10 pm on Tuesday, 12.45 percent was broken. On the other hand, on Monday, the company’s stock started trading at Rs 265 on BSE, which was 1.20 per cent higher than the fixed price of Rs 261.85. Last month, in a special session held to assess the listing price of Jio Financial, the price was fixed at Rs 261.85. During trading, its stock fell by 3.85 percent to Rs 251.75, which is also its ‘lower circuit’. At the same time, the company’s share was listed at Rs 262 in NSE. But later it fell by 4.94 percent to Rs.248.90. The market valuation of this newly listed company of Reliance was Rs 1,59,943.93 crore in early trade on Monday.
Demerger of Reliance Industries happened last month
JFSL was separated from Reliance last month. It was listed as ‘dummy’ since pricing, but was not trading. However, with the commencement of trading in the company on Monday, Jio Financial has been added as an additional company to both BSE Sensex and NSE Nifty. After its separation, this has been done to prevent high volatility in the shares of Reliance Industries.
The demerger took place on 20 July
On July 20, Reliance Industries Limited’s financial services business ‘Strategic Investment Limited’ was demerged. For this, a pro-opening session program was organized in NSE. In this, the stock price of Jio Financial Services was fixed at Rs 261.85. After the demerger, shareholders of Reliance Industries Limited got one share of Jio Financial Services for every one share held. Meanwhile, the company announced the formation of a joint company with BlackRock with a 50-50 percent stake in the market. On the corporate side, it has been reported in the market that both ZFS and BlackRock will make an initial investment of $150 million each in the new venture. Blackrock’s Asia-Pacific head Rachel Lord said that Jio Blackrock will use the combined strength and expansion of both companies to serve millions of investors in India. Hitesh Sethia, President and CEO of JFS, terming the partnership with BlackRock, one of the world’s prestigious asset management companies, as ‘exciting’, said that Jio BlackRock will prove to be truly transformative. Investors are expected to benefit greatly from the merger of both the companies.
Isha Ambani will manage the company
Jio Financial Services Limited Company has been formed after the change in Reliance Strategic Investments Limited. Mukesh Ambani’s daughter Isha Ambani will run this company. Along with him, former Comptroller and Auditor General (CAG) Rajiv Mehrishi has also been inducted on the board of directors of the company. He has been made an independent director for five years. Isha Ambani in the company Non-Executive Director has been appointed as Apart from this, Anshuman Thakur, Executive Officer of Reliance has also been made Non-Executive Director.
The cost of acquisition of RIL shares was 95.32 per cent.
Reliance Industries Before the demerger, the shareholders were informed that the cost of acquisition of RIL shares post merger is 95.32 per cent and the cost of acquisition of RSIL shares is 4.68 per cent. The company informed during its exchange filing that it is advised to apportion the pre-demerger cost of acquisition of equity shares in the following manner. RSIL stands for Reliance Strategic Investments Limited, has been demerged from RIL from today. now its name Jio Financial Services Has been done. With the de-merger, Jio Financial Services has become India’s fifth largest company in this sector.
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