“Jio Financial Services to be Removed from BSE Indices from September 1”


Jio Financial Services is set to be delisted from Bombay Stock Exchange Indices, including the Sensex, from September 1 due to its recent spin-off from Reliance Industries. Nifty indices’ decision will be based on the entity’s compliance with price limits for two consecutive days. MSCI and FTSE indices will maintain JFS without impact on inflow or outflow.

"Jio Financial Services to be Removed from BSE Indices from September 1"
"Jio Financial Services to be Removed from BSE Indices from September 1"

In a significant development in the financial market, Jio Financial Services (JFS), the demerged financial business of Reliance Industries, is set to be removed from the Bombay Stock Exchange (BSE) Indices, including the benchmark Sensex, starting September 1. The announcement comes after JFS underwent a spin-off from its parent company, Reliance Industries.

The Bombay Stock Exchange issued a notice stating that, effective prior to the opening of trading on Friday, September 1, 2023, Jio Financial Services Ltd would be delisted from all the S&P BSE Indices. This decision follows the company’s listing on Monday, August 21, 2023. The removal from the indices was originally scheduled for August 23, but it was postponed due to the stock being consistently locked in the lower circuit.

Jio Financial Services had marked its third consecutive session of gains on August 31, closing at an upper circuit of 5 percent and reaching Rs 242.50 per share on the BSE. However, Nuvama Alternative Research points out that the removal of JFS from the Sensex could lead to passive selling of about 60 million shares, approximately valued at $180 million.

Nuvama further stated that JFS will not be removed from the Nifty indices until the newly formed entity avoids price limits, either upward or downward, for two consecutive days. For instance, if the price limits are not breached on August 31 and September 1, the removal could take place on September 4. Consequently, the stock would exit the Trade to Trade (T to T) segment on September 4, potentially facilitating a smoother exclusion process.

Regarding Nifty indices, Nuvama anticipates that a press statement confirming the exclusion of the spun-off entity will only be issued if it successfully avoids price band breaches for two consecutive days. Nifty’s stance during this period will be communicated through its actions rather than official statements.

In contrast, the MSCI and FTSE indices are expected to retain Jio Financial in their indexes, without any associated inflow or outflow implications.

The removal of JFS from BSE Indices raises questions about the broader market implications and potential changes in investment strategies. This development underlines the dynamic nature of the financial market and the ripple effects of corporate actions on market indices.

The financial community will be closely watching the developments surrounding JFS and the indices it is associated with as the September 1 delisting date approaches.

Sources By Agencies

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