MUMBAI: Jio Financial Services (JFS) made a muted market debut, with its shares falling to the maximum permissible limit on stock exchanges on Monday. The shares of the financial services arm of Reliance Industries (RIL) were listed at Rs 262 per share on the NSE and Rs 265 on the BSE but fell 5% later during the day weighed down by selling pressure from institutional investors.
The share closed at Rs 248.90 apiece on the NSE and at Rs 251.75 apiece on the BSE. Its market capitalisation stood at nearly Rs 1.70 lakh crore. RIL had last month spun off JFS with the stock price arrived at Rs 261.85 in a special trading session held on July 20. Valuation was a major concern for investors as analysts had expected its price to be nearly Rs 160-Rs 190 rupees per share for JFS.
“JFS share listing commenced on a subdued note, mainly due to higher-than-anticipated price discovery. Additionally, mutual fund adjustments might trigger certain outflows,” Santosh Meena, head of research at Swastika Investmart, told this newspaper. Lack of clarity about future course of action of JFS is keeping investors jittery. Investors expect RIL Chairman Mukesh Ambani to give more details about JFS during the RIL annual general meeting on August 28.
“JFS’ valuation is based on expectations surrounding its future growth potential and 6.1% stake it owns in RIL. The future growth prospects of JFS are indeed bright since it can scale up its business with its connection with consumers and merchants,” said V K Vijayakumar, chief investment strategist at Geojit Financial Services. “But institutional selling is a drag on the share price in near-term. Since it is in the Trade-for-Trade segment, institutional selling is dragging price down,” he added.
At current valuation, JFS is the third-largest NBFC in the country, behind Bajaj Finance and Bajaj Finserv. Analysts are sounding bullish on its medium and long-term prospects. “While the short-term outlook is uncertain due to lack of clarity about business direction and profitability, the long-term outlook remains optimistic, supported by robust pedigree and extensive network- one of the industry’s largest,” said Meena.
JFS stock market debut
5% Fall in shares of JFS on the first day on BSE and NSE
Rs 248.90 apiece Closing price of JFS shares on Monday on the NSE
Rs 251.75 apiece Closing price of JFS shares on Monday on the BSE
Rs 1.70 l cr Market capitalisation of JFS at a price of `251.75 per share.
JFS has emerged as the third-largest NBFC in terms of market capitalisation after Bajaj Finance and Bajaj Finserv