NEW DELHI: The country’s richest billionaire Mukesh Ambani’s Reliance Industries (RIL) on Saturday announced the record date for allotment of equity shares in the demerger plan of its financial services business in Reliance Strategic Investments (RSIL).
While the effective date of the demerger has been fixed as July 1, July 20 has been fixed as the record day for allocating shares of the new company, according to the company’s stock exchange filing. RSIL will be renamed as Jio Financial Services (JFSL), which will be listed for trading on stock exchanges.
Veteran banker Hitesh Kumar Sethia will head the new entity as the MD and the CEO while Mukesh Ambnai’s daughter Isha Ambani and former CAG Rajiv Mehrishi are among the directors appointed on the board of the demerged financial services unit. “The board has approved the appointment of Sethia as Managing Director and Chief Executive Officer of RSlL for a period of 3 years; Appointment of Sethia is subject to the approval of members of the Company, the Reserve Bank of India and such other approvals as may be required,” said RIL in a regulatory filing.
Sethia is a financial services executive with over two decades of experience across Europe, Asia (India & Greater China) and North America. He has spent most of his career at ICICI Bank.
Besides that, RIL on July 20 will determine the equity shareholders of the company entitled to receive the resulting company’s new equity shares of RSIL. According to the scheme of things, Reliance Strategic Investments will allot one fully paid-up equity share of RSIL of face value of Rs 10 each, for every one share of Reliance Industries as of the record date.
After the demerger, JFSL will acquire liquid assets to provide adequate regulatory capital for lending to consumers and merchants, and incubate other financial services verticals such as insurance, payments, digital broking, and asset management for at least the next 3 years of business operations.
The demerger, which will create fifth-largest financier in terms of capital and compete directly with the likes of Paytm and Bajaj Finance, will complement Reliance’s consumer businesses, which include India’s largest wireless operator with about 428 million users, top retail chain with over 17,000 stores.
According to brokerage BofA Securities, by separating financial services from the core business, Reliance appears to be keeping arm’s length transactions from other entities, and in theory helping them better to attract strategic or JV partners who are keen only in the financial services arm - like what they did with Reliance Jio or tower InvIT.
Isha Ambani, ex-CAG Mehrishi appointed directors
Veteran banker Hitesh Kumar Sethia will head the new entity as the MD and the CEO while Mukesh Ambnai’s daughter Isha Ambani and former CAG Rajiv Mehrishi are among the directors appointed on the board of the demerged financial services unit. Sethia is a financial services executive with over two decades of experience across Europe, Asia (India & Greater China) and North America