Reliance Industries plans to demerge its financial services undertaking into Reliance Strategic Investments Limited (RSIL) and rechristen it Jio Financial Services Limited (JFSL) to be listed on the stock exchanges.
"The Board of Directors of Reliance Industries Limited (RIL), at its meeting held today, approved a Scheme of Arrangement amongst RIL, Reliance Strategic Investments Limited (RSIL) and their respective shareholders and creditors (Scheme) in terms of which, RIL will demerge its financial services undertaking into RSIL, to be renamed Jio Financial Services Limited (JFSL). JFSL would be listed on the Indian stock exchanges," RIL's statement read.
RSIL is currently a wholly-owned subsidiary of RIL and is an RBI-registered non-Deposit-taking Systemically Important (ND-SI) Non-Banking Financial Company.
According to the company, RIL's investment in Reliance Industrial Investments and Holdings Limited (RIIHL), a division of its financial services undertaking, will be transferred to JFSL.
The statement further mentioned that RIIHL ultimately benefits from 6.1% of RIL shares due to its interrest in Petroleum Trust and Reliance Services and Holdings Limited.
It is also stated that JFSL will acquire liquid assets to provide appropriate regulatory capital for lending to consumers, merchants, etc., as well as to incubate other financial services verticals like insurance, payments, digital broking, and asset management for at least the next three years of business operations.
JFSL plans to launch consumer and merchant lending business while continuing to evaluate organic growth, joint-venture partnerships as well as inorganic opportunities in insurance, asset management and digital broking segments, the statement said.
"The regulatory licenses for the key businesses are in place," it said.
Under the demerger scheme, the company said, one fully paid-up equity share of JSFL of Rs 10 each will be issued to RIL shareholders for every one (1) fully paid-up equity share in RIL (“Entitlement Ratio”).
The Board said it has approved the Entitlement Ratio based on the recommendations of the independent valuer and merchant bankers.
Commenting on the demerger of the financial services undertaking, Mukesh Ambani, Chairman and Managing Director, Reliance Industries Limited, said, “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."
"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 added.
(Disclosure: MoneyControl is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.)
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
