Shares of Jio Financial Services Ltd (JFSL) remained in focus on Wednesday as the demerged financial services arm of Reliance Industries (RIL) will be dropped from Nifty50, other indices, from September 7. The decision was taken after JFSL shares did not hit the price band in the last two consecutive trading days, i.e. September 4 and September 5, at NSE, as per the Index Maintenance SubCommittee (Equity) of NSE Indices.
The stock of the country’s second largest non-banking financial corporation (NBFC) in terms of market value was excluded from Sensex and other BSE indices from September 1. The BSE has revised the circuit limit for JFSL to 20% from the earlier 5%, while the stock is expected to move out of the trade-for-trade segment this week.
Reacting to the news, Jio Financial shares declined as much as 3.3% to ₹246.85 on the BSE in the first hour of trade so far. The NBFC heavyweight opened lower at ₹246.90 against the previous closing price of ₹255.10, while the market capitalisation slipped to ₹1.59 lakh crore. On the NSE, JFSL shares dropped 3.1% to hit a low of 247 in the early trade so far.
JFSL shares snapped six sessions gaining streak today after surging 20.5% during the same period. The stock, which officially made its debut on August 21, currently trades below its discovered price of ₹261.85 fixed at a special pre-open session conducted by the NSE on July 20. In the last thirteen sessions so far, the stock touched its highest level of ₹278.20 on listing day, while it hit its lowest mark of ₹205.15 on August 25.
JFSL shares had a weak debut on the stock exchanges amid sustained selling by institutional investors as they adjusted their portfolio ahead of the removal of the stock from benchmarks BSE Sensex and Nifty50.
Jio Financial shares touched 5% lower circuit limits in the first three straight sessions post listing, which forced stock exchanges to delay the exclusion of the stock from key indices to prevent too much volatility and price manipulation. JFSL was initially slated to be removed from all indices on August 24, three days (T+3) after its listing.
However, JFSL shares gained buying momentum after Mukesh Ambani, chairman and managing director of RIL, announced that the company will soon enter India’s insurance segment. In the 46th AGM of RIL conducted on August 28, Ambani said, “JFSL will 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. It will use predictive data analytics to co-create contextual products with partners and cater to customer requirements in a truly unique way.”
Ambani said that Jio Financial will consolidate the payments infrastructure to further drive digital payments adoption in India. “JFSL products will not just compete with current industry benchmarks but also explore path-breaking features such as blockchain-based platforms and CBDC. They will adhere to the highest standards of security, and regulatory norms and ensure protection of customer transaction data at all times.”
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