Jio Financial Services shares to be part of FTSE indices from July 20

FTSE Russell on Thursday said Reliance Industries' demerged entity Jio Financial Services (JFS) will be added to three of its indices namely, FTSE All-World Comprehensive Factor Index, FTSE Emerging Comprehensive Factor Index and FTSE All-World ex CW Balanced Factor Index effective July 20. 

Besides, Jio Financial Services will be added to Russell RAFI Global Index, Russell RAFI Global Large Company Index, Russell RAFI Emerging Index, Russell RAFI Emerging Large Company Index, Russell RAFI Global ex US Index and Russell RAFI Global ex-US Large Company Index, FTSE Russell said in a separate release.  

Also, the stock would be added to FTSE All-World Index, FTSE MPF All-World Index, FTSE Global Large Cap Index, FTSE Emerging Index, JPMorgan Diversified Factor Emerging Markets Equity Index, FTSE RAFI All World 3000 Index, FTSE RAFI All World 3000 Index QSR, FTSE RAFI Emerging Index and FTSE RAFI Emerging Index indices. 

The changes will be subject to the completion of the demerger of Jio Financial Services (India) from Reliance Industries (India, constituent), FTSE said.

FTSE noted that the listing date of Jio Financial Services has not yet announced. Therefore it will remain in the index at a static estimated price until its trading commences on the exchange. "If the trading day remains unknown after 20 business days, FTSE Russell will review the company in accordance with the FTSE Russell Spin-offs policy," it said.

 As per a domestic brokerage, Jio Financial Services will be listed within 2-3 months. Another brokerage pegged JFS listing price at around Rs 175-190 levels.

FTSE said a capital repayment which is equivalent to the entitlement value of Jio Financial Services will be applied to Reliance Industries on the ex-entitlement date. The number of shares of Jio Financial Services is based on the demerged terms of 1 Jio Financial Services share per every 1 Reliance Industries share held, FTSE added.

Reliance Industries recently received NCLT's go ahead for the demerger of financial services business into Reliance Strategic Investments (renamed as Jio Financial Services). The effective date of the scheme was July 1. The record date would set at July 20.

In the case of Reliance Industries' investors, NSE this week said the oil-to-telecom company's futures and options (F&O) contracts for the next three months will expire on July 19 in the wake of July 20 being fixed as record date for Jio Financial demerger.

"All existing contracts with expiry dates July 27, 2023, August 31, 2023 and September 28, 2023, will expire on July 19, 2023. The methodology of settlement shall be separately intimated by respective Clearing Corporations," said NSE in a press release.

Assuming that the investments in RIL shares represent 90 per cent of JFS’s networth, the book value per share of JFS would be Rs 190. "Our current SOTP-based target price of Rs 2,825 for RIL does not include the JFS value; hence, this event could lead to value-unlocking potential for RIL," Motilal Oswal Securities said.

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