Shares of Reliance Industries’ newly listed arm Jio Financial Services (JFS) hit the 5% upper circuit on Wednesday’s early trades to reach an intraday high of ₹ 231.25 apiece on the National Stocks Exchange (NSE). This happened after a block deal took place on the counter after Mukesh Ambani spoke about the company at Reliance Industries’ AGM.
Reports suggest that 49.66 million shares or a 0.8 per cent stake changed hands in two bunches on Tuesday. The buyers and sellers of the deal could not be ascertained immediately. However, a report by ET Now claimed that its promoter entity Jamnagar Utilities and Power, a step-down unit of Reliance Industries (RIL), likely bought about 5 crore Jio Financial Services shares at ₹ 208-211 apiece.
Mukesh Ambani said that JFS will prove to be an invaluable addition to Reliance’s ecosystem of customer-facing businesses, just like its telecom and retail subsidiaries. While addressing shareholders at the much-awaited annual general meeting, the business tycoon listed three reasons for his confidence in the debutant.
Ambani said that the digital-first architecture of JFS will give it an unmatched head start. He added that its business is capital intensive and Reliance has capitalised JFS with a net worth of ₹ 1.2 lakh crore to create one of the world’s highest capitalised financial service platforms at inception. He further said that JFS is being led by KV Kamath, a financial sector veteran, who formerly led ICICI Bank and then, later, the BRICS Bank.
JFS will enter the insurance segment to offer life, general, and health insurance products, potentially partnering with global players, Ambani announced at the AGM. The company will use predictive data analytics to co-create contextual products with partners and cater to customer requirements in a truly unique way, he added.
On the digital payments front, the business tycoon said that JFS will consolidate its payments infrastructure with a ubiquitous offering for both consumers and merchants, further driving digital payment adoption for India. He added that the company’s products will not just compete with current industry benchmarks but also explore path-breaking features such as blockchain-based platforms and CBDC.
Analysts believe that life insurance penetration in India is in line with the world average in India, while non-life insurance penetration is significantly behind the world average and this can prove to be a great opportunity for JFS. Meanwhile, the company has already announced its foray into the asset management industry in partnership with Blackrock.
JFS continues to be a part of the headline indices. It is the 51st stock in the Nifty 50 index and the 31st stock in the Sensex. Its exclusion from the indices was postponed to September 01, 2023, as it consistently hit circuit limits amid selling by passive funds. Passive funds have to compulsorily sell their shares in order to adjust their portfolio according to the weightage of stocks in the indices.
Written by Simran Bafna
