Jio Financial Services’ temporary inclusion in Nifty 50 and special pre-open for RIL stock- How it will work

Jio Financial Services’ temporary inclusion in Nifty 50 and special pre-open for RIL stock: How it will work

Reliance Industries Ltd’s demerged entity Jio Financial Services will temporarily enter the blue-chip indices NSE Nifty 50 and BSE Sensex on 20 July. NSE will conduct a special pre-open auction session for the Mukesh Ambani-led RIL stock, following the financial services arm spin-off, to determine RIL stock price without the demerged unit. Jio Financial Services will also join 18 other NSE indices such Nifty 100, Nifty 200, Nifty 500, Nifty Energy, and Nifty Oil & Gas until it is listed on the bourses for trading.Reliance Industries pre-call auction

A pre-open call auction for Reliance Industries will be conducted for price discovery following the demerger. This pre-open auction will be conducted from 9 to 10 am on 20 July, following which “all the unmatched orders of the pre-open call auction session within the dynamic price band of the discovered price shall be moved to the normal trading session at their limit price.”

What happens when Jio Financial Services is listed?

Before it is listed, a dummy ticker for JFS will be created, which will be added to the indices. The company will remain on the indices until it gets listed. Once the firm has been officially listed, JFS will trade on these indices for three days before it exits, at the price determined by the markets. This temporary inclusion will allow traders to trade the stock allotted to them in a 1:1 ratio following the split, and rebalance their portfolios accordingly.

About RIL demerger

Reliance Industries has decided to demerge its financial services unit Reliance Strategic Investments. RIL has fixed July 20 as the record date to determine the equity shareholders entitled to receive shares of Reliance Strategic Investments (RSIL). Under the scheme of the arrangement, Reliance Strategic Investments will allot one fully paid-up equity share of RSIL of face value of Rs 10 each, for every one share of Reliance Industries as of the record date. Reliance Strategic Investments will then be renamed Jio Financial Services (JFSL). Nuvama valued shares of JFS at Rs 168 apiece, but factored in a 30% holdco discount, therefore ascribing the shares a value of Rs 117 each.