Jio Financial Services Share Price –

The Indian market has been anticipating a public debut from Reliance Retail and Jio Platforms for years. Jio Financial Services Share Price, public debut on Monday, listing at 262 Indian rupees ($3.15) per share…

Jio Financial Services Share Price – LIVE –

However, towards the end of last year, Mukesh Ambani, Asia’s wealthiest individual and the chairman of Reliance Industries conglomerate, unexpectedly introduced a different offering to the market – a relatively unknown non-banking financial subsidiary.

This spin-off offering, known as Jio Financial Services, made its public debut on Monday, listing at 262 Indian rupees ($3.15) per share, the price set by local exchanges in a special session the previous month. However, the market did not hold onto that price on Monday.

Within minutes of trading, the share price dropped to 248.9 Indian rupees, triggering the lower circuit on the local exchanges (leading the exchanges to halt trading), resulting in Jio Financial Services’ market capitalization reaching $19.2 billion. With this valuation, the unit already stands as one of the major financial service providers in India, despite its weak start.

Jio Financial Services – Market Cap –

Jio Financial, which holds a 6.1% stake in Reliance, could witness a sell-off of $465 million by passive investors, as estimated by Nuvama.

Reliance hasn’t provided extensive details about the plans for Jio Financial Services, except for the announcement last month of a partnership with BlackRock to launch a consumer wealth management platform in India. In documents, Reliance has suggested that its services could encompass consumer and trader loans, payment platforms, insurance brokerage, AMC, and other NBFIs, as noted by Jefferies analysts in a Sunday report.

In a Monday note, analysts from Morgan Stanley described Jio Financial Services as a financial holding company with operational activities in its subsidiaries.

While there has been much news about the separation of Reliance Retail and Jio in recent years, the split of Jio Financial came as a surprise to most last year. The company has several reasons to spin off its financial services operations, including:

Firstly, the growth and expansion of a financial service provider require a different strategy and a distinct group of investors. Some investors might prefer to invest solely in growing businesses rather than channeling their funds into Reliance.

RIL Share Price -LIVE –

It was also a necessity, a kind of mandatory requirement. Jio Financials will compete with NBFCs (Non-Banking Financial Companies), meaning they will be engaged in lending. Unlike banks, they can’t open savings and current accounts to raise funds; they have to borrow and then lend. If financial services remained under Reliance and borrowed money, it would have appeared as debt on Reliance’s balance sheet, something unfavorable to the company and its shareholders.

So far, the company has been small, so there were no issues. Now, with financial services on an expansion trajectory, more funds would be needed to scale. Managing wealth management, insurance sales, and lending as separate entities makes complete sense. The regulations and regulatory authorities work differently in these areas, making it easier for the company to obtain licenses and approvals as a distinct entity.

Jio Financial Share Price NSE –