The demerger of Jio Financial Services (JFSL) from Reliance Industries (RIL) will take place on July 20, Thursday. Jio Financial Services will join the NSE Nifty 50 index on the same day, July 20, just one day before RIL’s June quarter earnings.
The record date for the same is July 20, which means those who have Reliance Industries shares as of closing on Thursday, will be eligible to get shares of Jio Financial Services.
As JFSL is being spun out of Reliance Industries, the share price of Reliance Industries will have to be adjusted accordingly. It makes sense to understand what it means for shareholders and how can they benefit.
Here are some frequently asked questions to explain the same:
Q: I hold shares of Reliance Industries. Will I benefit from this demerger? Will I be eligible to get shares of Jio Financial Services?
Yes. As per the plan, Reliance Industries shareholders will get 1 share of “Jio Financial Services” for every 1 share of Reliance Industries.
So if you own shares in RIL as of July 20, you are eligible to get shares of Jio Financial Services.
Q. I don’t have any shares of RIL as of now. Can I still buy and get shares of Jio Financial Services?
Yes, you can still buy shares of RIL and get Jio Financial Shares.
So, you have time till July 19, Wednesday.
Q. I hold shares of RIL. So, if I get shares of Jio Financial Services, how can I know the price for the same?
According to the plan, there will be a special pre-open session that will be held for the price discovery post the demerger.
The reference price used for the same would be Reliance Industries’ closing price on Wednesday.
For example, if Reliance closes at Rs 1,000 on Wednesday, and the stock settles at Rs 900 at the end of the special session, Jio Financial Services will be quoted at Rs 100 (1,000 – 900).
Post this, Jio Financial Services will join the indices, quoted at a fixed price of Rs 100.
Q. When will Jio Financial Services be listed on indices?
It will become the 51st stock on the Nifty 50 index, till the time it gets listed.
It will not be replacing any stock.
The listing date is not known yet.
But once Jio Financial is listed as a stock, at a future date, the stock will be removed from the index after the end-of-day on third day of its listing – subject to certain price conditions.
Q. I heard that investors are in a mad rush to buy RIL stocks. Should I buy the shares now?
Axis Securities recommends investors to buy Reliance Industries shares before the record date, i.e.
July 20 as it believes it to be an economical way to buy Jio Financial Services as the share price of the new entity may surge after listing.
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