Jio Financial Services Demerger: Reliance To Hold Meeting On May 2, Here Is How Shareholders Will Be Rewarded

Billionaire Mukesh Ambani-led Reliance Industries will hold meeting with its shareholders, secured and unsecured creditors on May 2 to discuss demerger of its financial services business. The company will consider and approve a scheme of arrangement between Reliance Industries and Reliance Strategic Investments and after the demerger Reliance Strategic Investments will be named Jio Financial Services.

Last year in October, Reliance Industries announced that its will demerge its financiall services business and list it separately on stock exchanges.

"The Board of Directors of Reliance Industries Limited approved a Scheme of Arrangement amongst RIL, Reliance Strategic Investments Limited (“RSIL”) and their respective shareholders and creditors in terms of which, RIL will demerge its financial services undertaking into RSIL (to be renamed Jio Financial Services Limited). Jio Financial Services would be listed on the Indian stock exchanges. RSIL is currently a wholly-owned subsidiary of RIL and is a RBI-registered non-Deposit taking Systemically Important (ND-SI) Non-Banking Financial Company," Reliance Industries had said in October.

Reliance has been developing and fostering a vibrant digital led-financial services platform through various digital applications. Reliance has developed best-in class applications having high customer engagement metrics and differentiated value propositions in their respective categories. The current footprint touches more than 20 million consumers, Reliance said.

Reliance Industries shareholders will get one equity share of Jio Financial Services for every one share of Reliance Industries enabling upfront value unlocking. Jio Financial Services will enable shareholder participation from inception in an attractive, fully digital financial services platform, that is well-capitalized to tap the high growth financial services business.

The move is likely to benefit Reliance shareholders as it is being viewed as value unlocking exercise by the country's most profitable organisation which has interests in various businesses ranging from oil exploration to retail to telecom services. With the separate listing of Jio Financial Services Jio will be entering the fast changing fintech business and experts say that Reliance can disrupt the business as it has a large telecom subscriber base.

Following Reliance's announcement of holding the meeting on May 2, Reliance Industries shares rose as much as 4.83 per cent to hit an intraday high of Rs 2,343. Reliance was the top gainer in the Nifty 50 basket of shares and alone contributed nearly 300 points towards gain in the Sensex.