RIL to demerge financial services undertaking, list Jio Financial Services

announced on Friday the split of its financial services business into a separate entity and its subsequent listing.

The financial services business currently known as Reliance Strategic Investments will be spun off and the resulting entity will be called Jio Financial Services.

The revenue of the financial services business as at 31 March 2022 was Rs 1,387 crore or 0.3% of RIL’s total revenue.

The demerger will take place through a share swap agreement and no cash will be involved, RIL said in a statement. RIL shareholders will receive one Jio Financial Services share for each share they hold.

RIL’s interest in Reliance Industrial Investments and Holdings Ltd, part of the financial services company, will be transferred to Jio Financial Services.

Reliance Industrial Investments, through its interest in Petroleum Trust and Reliance Services, is the ultimate beneficiary of RIL’s 6.1% interest, and Holdings Ltd. Jio Financial Services will acquire cash to provide adequate regulatory capital for consumer and merchant lending.

The capital buffer will also help incubate other financial services industries such as insurance, payments, digital intermediation and wealth management for at least the next three years of business operations.

Regulatory licenses for key companies are in place, RIL said. Jio Financial Services plans to open a consumer and merchant lending business to complement and supplement traditional credit bureau-based underwriting.

It will continue to evaluate organic growth, joint venture partnerships, as well as inorganic opportunities in the insurance, wealth management, and digital intermediation segments.

Jio Financial also aims to enable shareholders to participate in the fully digital financial services platform. RIL has not provided a timeline for the completion of the proposed demerger as it requires legal and regulatory approvals. RIL to demerge financial services undertaking, list Jio Financial Services

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