Jio Financial Services To Be Removed From Sensex On September 1

Jio Financial Services (JFS), the demerged financial business arm of Reliance Industries, will be removed from the BSE, the index said on Thursday (August 31).

“…effective prior to the open of trading on Friday, September 01, 2023, Jio Financial Services Ltd will be removed from all the S&P BSE Indices following its listing on Monday, August 21, 2023, due to its spin-off from its parent, Reliance Industries,” the BSE said.

The stock was initially scheduled to be delisted on August 23, just two days after its listing on August 21. However, the plan was delayed by the exchanges since Jio Financial Services remained locked in the lower circuit.

On August 31, the stock rose for the third straight session and closed at an upper circuit of 5%, reaching INR 242.50 per share. Per Nuvama Alternative Research, JFS constitutes 1.1% of Sensex’s weight, potentially leading to a passive selling of about 60 Mn shares (worth approximately $180 Mn).

Nuvama said that Jio Financial won’t be removed from Nifty indices until the newly formed entity avoids price limits (upward or downward) for two consecutive days. The research firm said Nifty would release a press statement confirming the exclusion only if it avoids price band breaches for two consecutive days. They won’t communicate during this period.

In contrast, MSCI and FTSE indices will retain Jio Financial Services without any impact on inflow or outflow.

At the 46th Annual General Meeting (AGM) of Reliance Industries on Monday (August 28), chairman Mukesh Ambani said that JFS will have products in the payments and insurance segments in India besides being in the asset management business.

“In payments, JFS will consolidate its payment infrastructure with a ubiquitous offering for both consumers and merchants, further driving digital adoption,” said Ambani, adding that JFS products will not only compete with current industry benchmarks but also new-age features such as blockchain-based platforms and the central bank digital currency (CBDC).

JFS came into being last year after RIL announced the demerger of its financial services business and the spin-off of Reliance Strategic Investments as Jio Financial Services.

Ambani had also claimed that JFS had become the world’s highest-capitalised financial services platform at inception, before the delisting announcement. The company is focused on lending, insurance, payments and investments.