The market discovered price of Rs 261.85 per share of Jio Financial Services has come much higher than most brokerages' estimates, says V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
This high price is a reflection of the market's assessment of Jio Financials' potential. The wide reach of JFSL through RIL's other business segments like Reliance Retail has the potential to grow the company at a fast pace for many years to come. The market is discounting this potential, he said.
Centrum Broking said in a note that Reliance Industries Ltd's (RIL) press release gives a formula for determination of cost of acquisition of equity shares of the company (RIL) and Reliance Strategic Investments Ltd (RSIL), which will be renamed as Jio Financial Services Ltd (JFSL). The formula states apportion of de-merger cost of acquisition of equity shares of the RIL in the ratio of 4.68 for RSIL and 95.32 for RIL.
Income Tax provisions states that the Cost of Acquisition in case of demerger will be net worth of the Resulting Company (RSIL) divided by the net worth of the Demerged Company (RIL).
"Thus, we use the standalone net worth of RIL of Rs 5 tn and apportionment ratio of 4.68 per cent of RSIL to arrive at net worth of RSIL of Rs 235 bn. The effective date of scheme is July 1, 2023, so this ratio will be calculated on the standalone BS as on June 30, 2023. Since, RIL has not reported its Q1FY24 results yet, we have based our calculation on net worth as on March 31, 2023. The resulting company had a net worth of Rs 279.6 bn as on FY22," Centrum Broking said.
As part of the scheme, RIL will transfer its investment in Reliance Industrial Investments and Holdings Ltd (RIIHL) to JFSL. RIIHL is the ultimate beneficiary of 6.1 per cent RIL shares. Over past few months, investors had questions on whether the 6.1 per cent treasury shares in RIL will be transferred at Book Value or Market Value. The net worth of Rs 235 bn, suggests that the transfer will be at the Book Value.
In the special price discovery session held today, the price of JFSL has been discovered at Rs 262, the note said.
Adani Power gets Letter of Intent to acquire Vidarbha Industries Power
Adani Power Limited (APL) on Monday said it has received a Letter of Intent (LOI) to acquire Vidarbha Industries Power Limited.
Gautam Adani hails MP's investment readiness, transformative leadership of PM Modi, CM Yadav
Announcing a whopping Rs 1.10 lakh crore investment and creation of 1,20,000 lakh jobs by the end of the decade, India’s top businessman Gautam Adani lauded the transformative leadership of Prime Minister Narendra Modi and Chief Minister Dr Mohan Yadav,
Adani Portfolio's tax contributions reach Rs 58,104 crore for FY 2023-24
The Adani Group's total global tax and other contributions to the exchequer amounted to Rs 58,104.4 crore for the financial year 2023-24, showcasing a significant increase from the previous year's Rs 46,610.2 crore through its portfolio of listed entities, the company said on Sunday.
Reliance Consumer Products partners with Assam’s established business house, Jericho, to set up a cutting-edge bottling facility
Reliance Consumer Products Ltd (RCPL), a leading FMCG and beverage company, has strengthened the presence of Campa’s portfolio in Northeast India with the inauguration of a new bottling plant in Guwahati, Assam. Developed in collaboration with local partner Jericho,
India poised to stay world’s fastest growing economy in 2025-26: RBI bulletin
High frequency indicators point towards a sequential pick-up in momentum of India's economic activity during the second half of 2024-25, which is likely to sustain moving forward, according to the latest RBI monthly bulletin.
Adani Portfolio clocks highest ever TTM EBITDA of Rs 86,789 crore, core infra biz surges
Led by its core infrastructure business, the Adani Portfolio has delivered the highest-ever trailing-twelve-month (TTM) EBITDA of Rs 86,789 crore, the Adani Group said on Thursday.
India doing well on protecting small investors, corporate governance improved significantly: NSE CEO
India is doing well in protecting small investors while corporate governance has improved significantly amid rapid technological changes, National Stock Exchange (NSE) MD and CEO, Ashishkumar Chauhan, said on Tuesday.
Tesla ramps up hiring in India after Elon Musk-PM Modi meet in US
After the successful visit of Prime Minister Narendra Modi to the US, Elon Musk-run Tesla has ramped up hiring in India, a market where it is slated to enter anytime soon.