Logo Showing demerger of Reliance Industry


 In a strategic move to capitalize on the burgeoning demand for modern financial services catering to retail and small-business customers, Reliance Industries Limited (RIL) is set to demerge its financial arm, Jio Financial Services, from the parent company. The demerger will see Jio Financial Services listed as a separate entity on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Moreover, it will also find inclusion in prominent indices such as Nifty50, Nifty 100, Sensex, and more.


The announcement of the demerger was made back in October, and today marks the day when RIL shareholders will receive one equity share of Jio Financial Services for each share held in RIL.


Jio Financial Price Discovery:

A special pre-opening trading session will take place for RIL shares between 9 am and 10 am on the demerger day. This session is crucial in determining the adjusted share price of RIL after the demerger of Jio Financial Services. During this session, traders can place, cancel, or modify orders.


Let's illustrate the price discovery process with an example:

- On the day prior to the demerger, RIL's closing price was ₹2,800.

- During the special session on the demerger day, RIL trades at ₹2,600.

- After the demerger, the newly listed Jio Financial Services will be priced at ₹200 per share (₹2,800 - ₹2,600).


Following the demerger, Jio Financial Services will be included in various indices like Nifty 50, Nifty 100, and others, at a constant price of ₹200 per share until it is officially listed as an independent entity.


Purpose of the Special Pre-Open Session:


The stock exchanges revised their approach to demergers in April, introducing the requirement for a special pre-open session. This session is conducted by the exchange and helps retain the demerged entities in the index. As per the new norms, the demerged business will be included in the index at a constant price determined during the pre-open session.


Jio Financial's Future in Indices:


Once Jio Financial Services is officially listed as a separate entity, it will remain in the indices for three days after listing, subject to specific price conditions. After this period, the company will be removed from the indices.


The demerged entity, Jio Financial Services, is set to be included in several indices on both NSE and BSE. BSE has already announced that Jio Financial will be added to 18 of its S&P BSE indices, including the prestigious S&P BSE Sensex. Meanwhile, NSE will include Jio Financial in its Nifty 100, Nifty 200, Nifty 500, and various sectoral indices.


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Reliance Infrastructure Shares Rally:

In a separate development, shares of Reliance Infrastructure Ltd witnessed a significant surge in Wednesday's trading session. The stock jumped a notable 10.75%, hitting a day high of ₹157.15, up from the previous close of ₹141.90. Today's turnover on the counter stood at ₹49.72 crore, with over 34.20 lakh shares changing hands, well above the two-week average volume of 4.94 lakh shares.


Technical analysts have identified support levels for Reliance Infrastructure at ₹147 and ₹143, with resistance around ₹160. Experts remain divided on the stock's prospects, with some projecting bullish targets of ₹168 to ₹220, while others advise caution until a daily close above ₹160 is achieved.


Despite a 21.95% decline from its 52-week high, the stock has shown a promising 55.98% gain from its one-year low price. Market experts emphasize that the risk-reward ratio looks favorable for long-term investors, given the valuable assets and robust cash flow of Reliance Infrastructure.


Disclaimer:

Investors and traders are advised to conduct thorough research and consider the dynamic nature of the stock market before making any investment decisions. The information provided here is based on the data available at the time of reporting and may be subject to changes and updates. Please refer to the latest market data and official statements for accurate and up-to-date information.