How Reliance Shareholders Will Be Rewarded With Jio Financial Services Shares After Demerger

Billionaire Mukesh Ambani-led Reliance Industries will demerge its financial 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 said in a press release.

The investment of RIL in Reliance Industrial Investments and Holdings Limited, which is a part of the financial services undertaking of RIL, will stand transferred to JFSL. RIIHL is the ultimate beneficiary of 6.1 per cent RIL shares through its interest in Petroleum Trust and Reliance Services and Holdings Limited. 

As per the scheme of demerger Jio Financial Services will acquire liquid assets to provide adequate regulatory capital for lending to consumers, merchants, etc. and incubate other financial services verticals such as insurance, payments, digital broking, asset management for at least the next 3 years of business operations. 

The regulatory licenses for the key businesses are in place, the country's most valuable company said.

"With secular growth drivers, the Indian financial services sector is poised to undergo a digital transformation. The sector presents a large, under penetrated and growing addressable market, especially for retail and small-business focused product categories. JFSL and its subsidiaries (“JFS”) will leverage the technology capability of Reliance and focus on digital delivery of financial products to democratize financial services access for 1.4 billion Indians," the Mumbai-based company added. 

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.

How will Reliance Shareholders Will Be Rewarded With Jio Financial Services Shares:

RIL 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.