Reliance sets July 20 as record date for Jio Financial demerger

Reliance Industries (RIL) has fixed July 20 as the record date for the demerger of its wholly-owned subsidiary, Reliance Strategic Investments Ltd (RSIL), from the parent company, which would be later renamed Jio Financial Services Limited (JFSL). Under the demerger scheme, Reliance shareholders will get one share of RSIL for every share they own of RIL as of the record date. The demerger will pave the way for the splitting-off of the financial services arm into a separate entity, which will be listed on the domestic stock exchanges, BSE and NSE.

“July 20, 2023 has been fixed as the record date for the purpose of determining the equity shareholders of the company entitled to receive the resulting company new equity shares,” RIL said in a BSE filing on Saturday.

The decision was taken at RSIL’s board meeting on July 8, days after the National Company Law Tribunal (NCLT) gave its approval for the proposed demerger. Last week, the NCLT Mumbai Bench gave its approval for the demerger of the company's financial services unit and its listing on the stock exchanges.

In May this year, the oil-to-telecom conglomerate received the approval of its shareholders and creditors for the demerger plan. It had informed exchanges that the demerger would be done through a share-swap arrangement under which Reliance shareholders will be issued one equity share of JFSL for every share they hold in the company. The investment of RIL in Reliance Industrial Investments and Holdings Limited (RIIHL), which is a part of the financial services undertaking of RIL, will stand transferred to JFSL.

The board also approved the appointment of Hitesh Kumar Sethi as managing director and chief executive officer of the new entity for a period of three years, subject to the Reserve Bank of India’s approval.

“Hitesh Kumar Sethia has been designated as President and Chief Executive Officer of RSlL to hold such office till the effective date of his appointment as director,” it said.

The board of the new company has also appointed Isha Mukesh Ambani and Reliance executive Anshuman Thakur as non-executive directors.

Besides, former Union Home Secretary Rajiv Mehrishi, former MD and CEO of Punjab National Bank Sunil Mehta, and Bimal Manu Tanna, a chartered accountant who worked with PwC, have been appointed as independent directors on the board of RSIL. “The directors will be appointed for a term of five consecutive years up to July 6, 2028, subject to approval of the members.”

Reliance has been building a vibrant financial services platform to create value for every stakeholder. JFSL is uniquely positioned to capture multiple growth opportunities in financial services bringing millions of Indians into formal financial institutions. It will be a technology-led business, delivering financial products digitally by leveraging the nationwide omnichannel presence of Reliance’s consumer businesses, as per the company.

JFSL plans to acquire liquid assets to provide adequate regulatory capital for lending to consumers and merchants. Besides, it will incubate other financial services verticals such as insurance, payments, digital broking, and asset management for at least the next three years of business operations.