Shares of Reliance Industries (RIL) rallied more than 4 per cent intraday on Friday to trade above Rs 23,00 apiece on the back of the decision to convene a meeting of shareholders and others next week to seek approval for the demerger of financial services business.
RIL shares opened at Rs 2,255 on NSE and touched day’s high of Rs 2,343.45. At 2:15 PM, the scrip held firmly in green to quote at Rs 2,337. As many as 94.50 shares of the company changed hands around the same time, according to exchange data.
The Mumbai headquartered oil-to-telecom conglomerate on Thursday in a regulatory filing said that it is all set to go ahead with the demerger of its financial services business. The company led by India’s richest man Mukesh Ambani has convened a meeting of its creditors and shareholders on May 2 to consider and approve the proposed scheme of arrangement between Reliance Industries Limited and Reliance Strategic Investments (RSIL).
While the meeting of secured creditors will commence at 10:45 am, unsecured creditors’ meeting will take place at 11:45 am. The meeting of equity shareholders will take place at 2 pm, according to the filing.
Reliance Industries had in 2022 announced the demerger plan of its financial services business into a separate entity. Once the demerger takes effect, the name of the Reliance Strategic Investments will be changed to Jio Financial Services Limited. The resulting company will list on bourses separately.
The demerger will be done through a share-swap arrangement. Reliance Industries shareholders will get one share of Jio Financial Services for every share held by them.
The implementation of the proposed demerger scheme is subject to approval from the National Company Law Tribunal (NCLT), Reserve Bank of India (RBI), Insurance Regulatory and Development Authority of India (IRDAI) and other regulatory authorities. The company has already submitted applications for approvals to the RBI and IRDAI.
Reliance Industries has appointed veteran banker KV Kamath as the non-executive chairman of Jio Financial Services.
RIL Share Price Target
Meanwhile, Abhijeet Bora, Deputy VP Research Analyst at Sharekhan by BNP Paribas, said that a sharp 9 per cent correction in RIL’s stock price in CY23YTD provides good entry opportunity as earnings outlook for consumer centric businesses remain strong while stability in O2C business would lend support to standalone business. He maintained a Buy on RIL with an unchanged price target of Rs 3,050.
