Jio Financial Services Excluded from S&P BSE Indices: What’s Next for Investors?”
Reliance’s JFSL Spin-off: Impact on Stock Market.
Discover how the spin-off of JFSL from Reliance is affecting the stock market and investor sentiment.
Introduction
The world of finance and stock markets is ever-evolving, and it’s crucial for investors to stay updated with the latest developments. In this blog post, we will delve into the recent announcement regarding Jio Financial Services Ltd (JFSL) and its exclusion from the S&P BSE Indices. This exclusion follows its listing on Monday, August 21, 2023, and will take effect from Friday, September 1, 2023.
Background on Jio Financial Services
Jio Financial Services Ltd is a non-banking financial services (NBFC) unit of Reliance Industries Ltd. It was demerged from its parent company, Reliance Industries, and has been closely monitored by investors and financial experts.
Why JFSL is Being Removed
Asia Index Private Ltd, the organization responsible for managing the S&P BSE Indices, announced that Jio Financial Services would be removed from all the indices. This decision was made due to its spin-off from Reliance Industries.
Stock Performance
As of the most recent trading session, Jio Financial Services share price concluded at ₹233.65 apiece on BSE, marking a 0.41% increase. Notably, the stock did not hit the lower circuit in the previous two trading sessions, which was a critical factor in determining its removal from the indices.
Extension of Removal Date
The removal of JFSL shares from the indices was extended twice by the stock exchanges after the shares hit the lower circuit for four consecutive sessions following their listing.
Last-Minute Decision
In an effort to provide certainty to clients and investors, the Index Committee established a 2 PM IST cut-off time for assessing the lower circuit limit. If Jio Financial Services did not hit the lower circuit before this cut-off time, the company would be dropped from all the S&P BSE Indices effective from September 1, 2023.
Recent Gains
Despite the uncertainty surrounding its inclusion in the indices, Jio Financial Services share price extended gains for the second consecutive session on Wednesday, August 30, 2023. The shares were locked at the 5% upper circuit limit, indicating investor interest and optimism.
Implications and Analyst Insights: Now, let’s take a closer look at what experts in the field have to say about this development:
- Prashanth Tapse, Research Analyst at Mehta Equities: Prashanth Tapse believes that after a somewhat disappointing listing on August 21, 2023, JFSL faced pressure from funds and experienced lower circuit limits. However, with its removal from Sensex and the completion of 10 days under the T2T segment, Tapse suggests that volatility may reduce. He advises that risk-oriented traders could consider accumulating JFSL shares in two tranches up to the 218 level.
- Mohit Gulati, CIO & Managing Partner of ITI Growth Opportunities Fund: Gulati highlights that JFSL’s exclusion from the Sensex may not have a significant impact on its inclusion in other indices like MSCI and FTSE. As long as it remains in these indices, it may not face significant inflow or outflow pressures. Additionally, Gulati mentions that NIFTY’s inclusion of JFSL may depend on meeting certain price limits. Therefore, the Sensex exclusion might be a more isolated event.
Conclusion
The removal of Jio Financial Services from the S&P BSE Indices is a significant development in the world of finance. Investors and market enthusiasts should keep a close eye on how this exclusion affects the stock’s performance and the broader market. Stay tuned for more updates on this evolving situation in the financial sector.
Disclaimer: Any views and investment tips expressed by any author, investment experts or agencies here on MSTimes are their own and not those of mine or website. I advises users to consult/check with certified Financial experts / advisors before taking any investment decisions.
