Reliance Industries Ltd., owned by billionaire Mukesh Ambani, said on Friday that it will spin off its financial services division and float it on stock markets.
According to a statement from the company, shareholders of Reliance would get one share of Jio Financial Services Ltd (JFSL) ownership for every share they already own in the business.
While continuing to evaluate organic development, joint venture partnerships, and inorganic prospects in the insurance, asset management, and digital brokerage categories, JFSL expects to start up consumer and commercial lending companies, according to the company.
“The Reliance Industries Ltd. (RIL) Board of Directors approved a Scheme Agreement between Reliance Industries Ltd. (RIL), Reliance Strategic Investments Limited (RSIL), and their respective shareholders and creditors in its meeting held today (Friday),” he said. “RIL will spin off its financial services company in RSIL, which will be renamed Jio Financial Services Limited or JFSL.
The stock markets in India would list JFSL.
A non-deposit-taking, non-deposit-registered non-bank systemically significant financial business with the RBI, RSIL is presently a fully owned subsidiary of RIL.
According to the plan, owners of RIL would exchange one fully paid equity share of Rs. 10 held in RIL for one JFSL equity share with a nominal value of Rs.
Additionally, RIL would transfer to JFSL its shareholding in Reliance Industrial Investments and Holdings Limited (RIIHL), a division of RIL’s financial services division.
For at least the next three years of business operations, JFSL will invest in liquid assets to provide appropriate regulatory capital for consumer and merchant lending as well as to incubate additional financial services verticals including insurance, payments, digital brokerage, and asset management.
He said that “Regulatory licences for essential enterprises are in place.”
According to the company, JFS’s organisational design enables it to collaborate with financiers or strategic investors who have a stronger strategic focus to assist the business’s development engines.
Common legal and regulatory permissions, such as those from the NCLT, stock exchanges, SEBI, and RBI, are required for the transaction.
Mukesh Ambani, Chairman and CEO of RIL, said on the spin-off “JFS will be a genuinely creative, customer-focused, digital-first financial services firm that offers all Indians easy-to-use, reasonably priced financial solutions.
According to him, JFS would be a technology-driven organisation that uses the broad omnichannel presence of Reliance’s consumer companies to supply financial products online.
According to him, “JFS is perfectly positioned to seize various financial services development prospects that are luring millions of Indians to formal financial institutions.”
The financial services industry in India offers a large, underserved, and expanding potential market, particularly for product categories targeted at consumers and small businesses.
