BSE, NSE Defer Removal Of Jio Financial Services From Indices To August 29

The decision was made due to the stock hitting the lower circuit limit for two consecutive days. The closing prices on the BSE and NSE were recorded at Rs 239.20 and Rs 236.45, respectively

The domestic stock exchanges, BSE and NSE, have extended the timeline for the exclusion of Jio Financial Services Ltd (JFSL) from their indices to August 29. This decision was made due to the stock hitting the lower circuit limit for two consecutive days following the listing on Monday. The downward trend of JFSL's stock persisted for the second consecutive session. The closing prices on the BSE and NSE were recorded at Rs 239.20 and Rs 236.45, respectively. Earlier, the stock was scheduled to be removed from the indices on August 24.

"Asia Index Private Limited (AIPL) recently announced that effective prior to the open of trading on Thursday, August 24, 2023, Jio Financial Services Ltd will be removed from all the S&P BSE Indices following its listing on Monday, August 21, 2023, due to its spin-off from its parent, Reliance Industries," said a BSE circular.

Adding that since the stock has hit a lower circuit limit for 2 consecutive days i.e., Monday, August 21, 2023, and Tuesday, August 22, 2023, the Index Committee has determined to postpone the removal of JFSL from all the S&P BSE Indices by another 3 days. 

“JFSL will now be removed from all the S&P BSE Indices effective prior to the open of trading on Tuesday, August 29, 2023,” the BSE said. Further adding that if JFSL continues to hit the lower circuit in the next two days, the removal date will be deferred by another three days.

On the other hand, there has been no formal confirmation from NSE Indices yet, however, the current methodology for demergers indicates the same postponement. 

"In case, during the first 2 days of these 3 days, if the spun-off business/entity hits the price band on both days, then the exclusion date shall be deferred by another three days," NSE Indices said on April 26, as per a Moneycontrol report. 

On July 20, Jio Financial Services Ltd (JFSL), formerly known as Reliance Strategic Investments Limited, was demerged from its parent company Reliance Industries during a special pre-open session. During its listing, JFSL shares were priced at Rs 265 each on the BSE and Rs 262 on the NSE, compared to the earlier discovered price of Rs 261.85 per share after the demerger. 

With a market capitalisation of Rs 1.50 lakh crore at Rs 239.20 per share, JFSL is now the third-largest Non-Banking Financial Company (NBFC) in India, trailing behind Bajaj Finance (Rs 4.27 lakh crore) and Bajaj Finserv (Rs 2.36 lakh crore), according to a report by the Indian Express. Among the highest-valued companies, Jio Financial ranks 34th, surpassing industry giants like Tata Steel, Coal India, and SBI Life.

BSE had declared that JFSL shares would be traded in the T Group of securities on the exchange. The scrip will be part of the Trade-for-Trade segment for 10 trading days. The Trade-for-Trade segment involves shares being traded solely for delivery, meaning that shares cannot be bought and sold on the same day. This approach is taken to minimise volatility and prevents price manipulation.