31-Mar-2023
2 mins read
Meeting to Approve Demerger Scheme
On May 2, Reliance Industries Ltd called for a meeting of creditors and shareholders to approve its financial service business’ demerger. For every share held in RIL, shareholders will receive one share in the new demerged entity. The secured and unsecured creditors will also participate in the meeting to give their approval.
Jio Financial Services to be Listed on NSE and BSE
Following the demerger, Reliance Strategic Investments will be renamed Jio Financial Services and listed on the National Stock Exchange and Bombay Stock Exchange. The board’s approval for the demerger was granted in October last year.
Leadership for Jio Financial Services
KV Kamath will serve as the non-executive chairman of Jio Financial Services after the demerger, providing guidance and experience to the new company.
Formation of Jio Financial Services
The financial services business consists of various subsidiaries, including Reliance Retail Finance, Reliance Payment Solutions, and Jio Payments Bank. RIL’s investment in Jio Payments Bank will be transferred under RBI regulations.
Reasons for Demerger
The demerger aims to facilitate growth, expansion, and differentiated strategies for the financial services business and to attract investors, strategic partners, and lenders with a specific interest in the sector. As a separate entity, the financial services business will have higher leverage, allowing for increased flexibility in the market.
Unlocking Value for Shareholders
The demerger is expected to unlock value for Reliance Industries shareholders by allowing the financial services entity to operate independently and focus on its core competencies. In 2021-22, the combined revenue of RIL’s financial services business and Reliance Strategic Investments was Rs 1,535.6 crore, with a combined asset base of Rs 27,964 crore.
