22-Aug-2023
2 mins read
The removal of Jio Financial Services from the prestigious Nifty 50 and Sensex has been rescheduled for August 29, a delay from its initial date of August 24.
Circuit Limit Hits Prompt Rescheduling
Immediately after its listing, Jio Financial Services saw its stock hitting the circuit limit for two straight days. This unforeseen circumstance has prompted a change in its removal from the index.
S&P Dow Jones Indices Issues Statement
S&P Dow Jones Indices, in its communication to clients, revealed: “The index committee has decided to postpone JFSL’s exclusion from all S&P BSE Indices by another three days. This means JFSL will now exit all the S&P BSE indices right before trading commences on Tuesday, August 29.”
NSE Indices’ Methodology Supports Decision
Although no official statement has been released by NSE Indices, their current demerger methodology supports such a move. A press release from NSE Indices dated April 26 outlined a similar procedure for situations where a stock hits the price band on both days during a 3-day period.
Anticipated Impact on Passive Funds
With this rescheduling, Nuvama Alternative & Quantitative Research predicts that passive funds will see a combined outflow of around 145-150 million shares across both the Nifty and Sensex.
Jio Financial’s Standing in Other Indices
Despite these changes, Jio Financial will retain its position in both the MSCI and FTSE indices. Abhilash Pagaria of Nuvama notes that there will be no new buying or selling activities related to the stock in these indices.
Jio Financial Services’ Expansion in the Financial Sector
Listing on August 21, Jio Financial Services has emerged as India’s second-largest non-bank financial company, only behind Bajaj Finance. Analysts have indicated that JFS may potentially expand into a plethora of financial service sectors, from lending and digital broking to insurance, mutual funds, and payments.
Strategic Alliance with Blackrock
Further solidifying its position, JFS has announced a strategic partnership with Blackrock, the world’s leading asset manager. Together, they plan to launch a mutual fund company in India with an ambitious initial investment target of $300 million.
Stock Performance
As of August 22, Jio Financial Services’ stock stands at Rs 236.45 on the NSE, boasting a market capitalisation of Rs 1.50 lakh crore.
Conclusion
The journey of Jio Financial Services, from its recent listing to its upcoming removal from key indices, is one to watch. With strategic partnerships in the pipeline and a broad spectrum of services on offer, JFS promises to be a significant player in India’s financial landscape.