Billionaire Mukesh Ambani’s Reliance Industries Limited said it will demerge its financial services arm and list it on the stock exchanges. In a statement, the firm said Reliance shareholders will be issue one equity share of Jio Financial Services Limited (JFSL) for every share they hold in the company.
JFSL plans to launch consumer and merchant lending business while continuing to evaluate organic growth, joint-venture partnerships as well as inorganic opportunities in insurance, asset management and digital broking segments, it said.
Reliance Said :
“The Board of Directors of Reliance Industries Ltd (RIL), at its meeting held today (Friday), approved a Scheme of Arrangement amongst RIL, Reliance Strategic Investments Limited (RSIL) and their respective shareholders and creditors in terms of which, RIL will demerge its financial services undertaking into RSIL (to be renamed Jio Financial Services Limited or JFSL),”.
JFSL would be list on the Indian stock exchanges.
RSIL is currently a wholly-own subsidiary of RIL and an RBI-register non-deposit-taking systemically important non-banking financial company.
Reliance Statement Said :
“Pursuant to the scheme, shareholders of RIL will receive one equity share of JFSL of face value Rs. 10 for one fully paid-up equity share of Rs. 10 held in RIL,”.
The investment of RIL in Reliance Industrial Investments and Holdings Limited (RIIHL), which is a part of the financial services undertaking of RIL, will stand transfer to JFSL.
JFSL will acquire liquid assets to provide adequate regulatory capital for lending to consumers and merchants, as well as incubate other financial services verticals such as insurance, payments, digital broking, and asset management for at least the next 3 years of business operations.
Reliance Statement Said :
“The regulatory licenses for the key businesses are in place,”.
JFS’s structure enables it to partner with strategic or financial investors with an enhance strategic focus to support the company’s growth drivers, the Reliance said.
The transaction is subject to customary statutory and regulatory approvals, including from NCLT, stock exchanges, SEBI and RBI.
Mukesh Ambani, Chairman and Managing Director, RIL, Said :
“JFS will be a truly transformational, customer-centric and digital-first financial services enterprise offering simple, affordable, innovative and intuitive financial services products to all Indians.”
JFS, Mukesh Ambani said, will be a technology-led business, delivering financial products digitally by leveraging the nationwide omnichannel presence of Reliance’s consumer businesses.
Mukesh Ambani Said :
“JFS is uniquely position to capture multiple growth opportunities in financial services bringing millions of Indians into formal financial institutions,”.
The Indian financial services sector presents a large, under-penetrate and growing addressable market, especially for retail and small-business-focus product categories.
