Reliance Industries Ltd has initiated the process to demerge its financial services business by calling for a meeting of creditors and shareholders. According to the company, its shareholders will get one share in the new demerged entity for every share held in RIL.
The secured and unsecured creditors and the shareholders of the company will be meeting on May 02 to approve the scheme of demerger.
After the demerger, the shares of Reliance Strategic Investments, which will be renamed Jio Financial Services, will be listed on the NSE and BSE, the company said in an exchange filing.
The approval of the board for the demerger came in October last year when the company announced that Reliance Strategic Investments would be renamed Jio Financial Services and KV Kamath would be the non-executive chairman of the new company.
The financial services business of the company consists of Reliance Retail Finance, Reliance Payment Solutions, Jio Information Aggregator Services and Reliance Retail Insurance Broking to Reliance Strategic Investments and Jio Payments Bank, and Reliance Industrial Investments and Holdings, the investment arm of RIL.
RIL said that transfer of its investment in Jio Payments Bank, will be under Reserve Bank of India regulations.
Also read: Reliance sets sights on insurance business
On the spinning off of its financial services business into a separate entity, RIL said, “Further growth and expansion of the financial services business would require differentiated strategy aligned to its industry-specific risks, market dynamics, and growth trajectory.
The demerger would help the financial services entity attract different sets of investors, strategic partners, lenders and other stakeholders having a specific interest in the financial services business.
As a separate entity, it would have higher leverage and also unlock value for shareholders of Reliance Industries.
In 2021-22, the financial services business of RIL and that of Reliance Strategic Investments reported a combined revenue of ₹1,535.6 crore, while the combined asset base was ₹27,964 crore.
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Reliance Industries’ creditors, shareholders to meet on May 02 on demerger of financial services business - BusinessLine
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