Reliance Industries to demerge and list financial services business

The board of  Reliance Industries on Friday approved a plan to demerge and list its financial services undertaking into Reliance Strategic Investment (RSIL) — to be renamed as Jio Financial Services (JFS).

Shareholders of RIL will receive one equity share of JFS of face value Rs 10 for one fully paid-up equity share of Rs 10 held in RIL.

“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,” RIL Chairman and Managing Director Mukesh Ambani said.

“JFS will be a technology-led business, delivering financial products digitally by leveraging the nation-wide omni-channel presence of Reliance’s consumer businesses. JFS is uniquely positioned to capture multiple growth opportunities in financial services bringing millions of Indians into formal financial institutions,” Ambani said.

RSIL is currently a wholly-owned subsidiary of RIL and is a Reserve Bank of India-registered non-deposit taking systemically important (ND-SI) non-banking financial company.

In a release, RIL said it approved the entitlement ratio based on the recommendations of an independent valuer and merchant bankers.

The investment of RIL in Reliance Industrial Investments and Holdings, which is a part of the financial services undertaking of RIL, will stand transferred to JFS.

RIIHL is the ultimate beneficiary of 6.1 per cent RIL shares through its interest in Petroleum Trust and Reliance Services and Holdings.

Additionally, through the scheme, JFS will acquire liquid assets to  provide adequate regulatory capital for lending to consumers, merchants, etc., and incubate other financial services verticals such as insurance, payments, digital broking, and asset management for at least the next three years of business operations.

The regulatory licences for the businesses are in place, it said.

RIL said JFS plans to launch a consumer and merchant lending business based on proprietary data analytics to complement the traditional credit bureau-based underwriting. “JFS will continue to evaluate organic growth, joint venture partnerships as well as inorganic opportunities in insurance, asset management and digital broking segments,” it said.

JFS will build a business of scale across attractive consumer segments to create value for every stakeholder, according to the release.