Jio Financial shares tumble over 5%; here's what analysts are saying

Shares of Jio Financial Services Ltd declined on Wednesday amid a broad-based selloff in domestic equities, with a few analysts attributing the sharp fall largely to weak market sentiment.

The Reliance Industries-backed stock tumbled 5.18 per cent to settle at Rs 230.45. Around 14.88 lakh shares changed hands on BSE, higher than the two-week average volume of 8.43 lakh shares. Turnover on the counter stood at Rs 34.72 crore, with the company's market capitalisation (m-cap) at over Rs 1.52 lakh crore.

Earlier in May this year, Jio Financial had informed stock exchanges that the overall shareholding of its promoter and promoter group increased from 47.12 per cent to 49.13 per cent.

Sharing a view on the stock's decline, Ravi Singh, Chief Research Officer at Master Capital Services, said, "The sharp fall in Jio Financial was largely a reaction to the overall weak market sentiment, which triggered profit booking across several stocks. There hasn't been any major negative development in the company's business that justifies such a steep decline. The company continues to expand its presence in lending, asset management, insurance and other financial services. While these businesses have significant long-term potential, they need time to contribute meaningfully to profitability."

He added, "In the current volatile market, stocks with high growth expectations tend to witness sharper price swings. Despite the recent correction, Jio Financial remains a company with strong backing and long-term growth opportunities, although investors should be prepared for some near-term volatility until earnings gain further momentum."

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, stated, "Jio Financial came under severe selling pressure during the fag-end of the trading session amid a sharp decline in financial and banking stocks. However, investors with a long term view can consider accumulating the stock on dips."

The weakness in Jio Financial coincided with a sharp decline in domestic benchmarks on Wednesday after US President Donald Trump said the ceasefire understanding with Iran was "over", as renewed geopolitical concerns in West Asia weighed on investor sentiment.

The 30-share BSE Sensex pack plunged 1,677.12 points or 2.15 per cent to settle at 76,503.60, while the NSE Nifty50 index dropped 516.65 points or 2.12 per cent to close at 23,882.05.

The market rout erased nearly Rs 8.96 lakh crore in investor wealth, with the BSE's total m-cap falling to Rs 471.23 lakh crore from Rs 480.20 lakh crore in the previous session.