Jio Financial shares in focus amid exclusion from Nifty, other NSE indices

Shares of Jio Financial Services Ltd (JFS) will be in focus on Wednesday, as the stock will be excluded from Nifty and other NSE indices from September 7. The stock did not hit the price band on two consecutive trading days and, therefore, the index maintenance sub-committee of NSE indices decided to remove it from various indices effective Thursday. To recall, the JFS stock was excluded from Sensex and other BSE indices from September 1. As per Nuvama Alternative Research's calculations, passive selling was anticipated to reach nearly 105 million shares, amounting to $324 million. With the revised 20 per cent price band, the exclusion process was seen without significant hiccups.   Jio Financial was a constituent of indices such as Nifty 100, Nifty 200, Nifty 500, Nifty Commodities, Nifty Energy,  and Nifty Infrastructure, among others. NSE indices had announced inclusion of Jio Financial (spun-off entity) on account of demerger of financial services business from Reliance Industries Ltd (RIL) effective from July 20. The stock got listed at Rs 265 apiece on August 21, a 1.18 per cent premium over its discovered price of Rs 261.85 apiece on July 20. IIFL Securities in an August note said JFS may target consumer durable loans, unsecured personal and small-ticket merchant loans by leveraging Reliance Retail and Jio’s physical and digital distribution channels. The domestic brokerage expects the scale-up to be gradual, as JFS builds out physical and collections infra - peers have 800-4,000 branches and 4,000-66,000 employees "FinTech lenders that typically lack physical and collections infrastructure have AQ challenges, which are reflected not only in higher delinquencies but also materially lower roll-back rates. Over the medium term, we expect JFS to add larger ticket size and secured consumer, merchant and MSME loans. These segments have a market size of Rs17trn, out of the Rs71trn of total retail and SME lending," it said. At RIL's 46th annual general meeting (AGM), Chairman and Managing Director Mukesh Ambani called Jio Financial as the fourth growth engine. He said the company's products would not just compete with current industry benchmarks but also explore path-breaking features such as blockchain-based platforms and CBDC. "They will adhere to the highest standards of security, regulatory norms and ensure protection of customer transaction data at all times. Jio Financial will enter the insurance segment to offer simple, yet smart, Life, General, and Health insurance products through a seamless digital interface, potentially partnering with global players. It will use predictive data analytics to co-create contextual products with partners and cater to customer requirements in a truly unique way," Ambani said.(Disclaimer: Recommendations provided in this article and/ or any reports attached or relied on herein are authored by an external party. The views expressed herein are those of the respective authors/ entities, and do not represent the views of Business Today (BT). BT does not guarantee, vouch for, endorse any of its contents and hereby disclaims all warranties, express or implied, relating to the same. BT further urges you to consult your financial adviser and seek independent advice regarding the contents herein, including stock investments, mutual funds, general market risks etc.)

Also read: Stocks to watch on September 6, 2023: Nykaa, TVS Motor Company, Route Mobile, Paytm, others