Reliance Industries to demerge, list financial services business

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Reliance Industries Limited will demerge its financial services under the name of Jio Financial Services Limited, which would be listed on the Indian stock exchanges.

The investment of RIL in Reliance Industrial Investments and Holdings Limited (“RIIHL”), which is a part of the financial services undertaking of RIL, will stand transferred to JFSL.

Additionally, through the Scheme, JFSL will acquire liquid assets to provide adequate regulatory capital for lending to consumers, merchants, etc., and incubate other financial services verticals such as insurance, payments, digital broking, asset management for at least the next 3 years of business operations. The regulatory licenses for the key businesses are in place.

With secular growth drivers, the Indian financial services sector is poised to undergo a digital transformation. The sector presents a large, under penetrated and growing addressable market, especially for retail and small-business focused product categories.

Reliance has been developing and fostering a vibrant digital led-financial services platform through various digital applications.

JFS plans to launch consumer and merchant lending business based on proprietary data analytics to complement and supplement the traditional credit bureau-based underwriting. JFS will continue to evaluate organic growth, joint-venture partnerships as well as inorganic opportunities in insurance, asset management and digital broking segments.

“JFS will be a technology-led business, delivering financial products digitally by leveraging the nation-wide omni-channel presence of Reliance’s consumer businesses. JFS is uniquely positioned to capture multiple growth opportunities in financial services bringing millions of Indians into formal financial institutions,” said Mukesh Ambani, Chairman and Managing Director, Reliance Industries.

JFS will also onboard an experienced management team and adopt best-in-class governance and risk management practices across verticals to create one of India’s leading financial services enterprises, it said in a statement.

RIL shareholders will get shares on a 1:1 basis in JFSL.