Jio Financial Services shares rise on bond issue plan

Shares of Jio Financial Services (JFS), the financial services arm of billionaire Mukesh Ambani-led Reliance Industries Ltd (RIL), will be in focus today amid a report that the company is planning to raise between ₹5,000 crore to ₹10,000 crore through its maiden bond issue. The company is reportedly in talks with merchant bankers and is looking to launch the issue in the March quarter of the current financial year 2023-24.

Snapping two sessions losing streak, Jio Financial shares opened marginally higher at ₹217.25 against the previous closing price of ₹215.60 on the BSE. In the early trade, the NBFC heavyweight gained as much as 0.85% to ₹217.45, while the market capitalisation rose to ₹1.38 lakh crore. The company is the third largest NBFC after Bajaj Finance and its holding company Bajaj Finserv in terms of market capitalisation.

The counter hit an all-time high of ₹278.20 on August 21, 2023, while it touched its record low of ₹205.15 on August 25, 2023.

JFS shares officially debuted on the stock exchanges on August 21, after spending a month as a dummy stock following demerger from the parent. The stock was listed at ₹262 on the NSE and ₹265 on the BSE against its discovered price of ₹261.85 fixed at a special pre-open session conducted by the NSE on July 20.

Last month, the company released its first quarterly results post listing on stock exchanges, which showed that its net profit more than doubled sequentially. The non-banking financial services (NBFC) arm of RIL posted a profit of ₹668.18 crore in the September quarter of the current fiscal (Q2 FY24), up 101.3% from ₹331.92 crore in the June quarter of FY24.

Total revenue from operations of the financial services firm jumped 48% on a sequential basis to ₹608 crore, aided by dividend income of ₹217 crore.

As per the company, total expenses increased sequentially by 32.7% to ₹71.43 crore as against ₹53.81 crore in the previous quarter.

During the demerger of JFS from the oil-to-telecom conglomerate, the RIL’s board had appointed Hitesh Kumar Sethi as managing director and chief executive officer of the company, as well as 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, were appointed as independent directors on the board for a term of five consecutive years up to July 6, 2028.

Last week, the Reserve Bank of India (RBI) approved the appointment of Isha Ambani, Anshuman Thakur and Hitesh Kumar Sethia as directors of the company.

Reliance Industries chairman Mukesh Ambani at the 46th annual general meeting had announced that JFSL would foray into the insurance segment. JFS plans to enter the insurance segment to offer simple, yet smart, life, general, and health insurance products through a seamless digital interface, potentially partnering with global players. 

Besides, JFS recently partnered with the U.S. investment major BlackRock India to enter the asset management industry in the country. It has formed a 50:50 joint venture (JV), Jio BlackRock, to foray into the Indian asset management market with JFS and BlackRock targeting an initial investment of $150 million each in the JV. 

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