Reliance Industries (RIL) Shares Skyrocket by Over 4%, Surpass 52-Week High as the Company Sets Record Date for Demerger of Financial Services Arm

Reliance Industries (RIL) witnessed a significant surge in its shares, experiencing a remarkable increase of over 4.5%. This surge led the shares to reach a fresh 52-week high of Rs 2,755 on the Bombay Stock Exchange (BSE). The surge came as a result of the energy-to-telecom conglomerate's decision to set July 20 as the record date for the demerger of its financial services arm, Reliance Strategic Investments. Following the demerger, the financial services arm will be renamed as Jio Financial Services (JFSL).

The company's board meeting, held on Friday, resulted in the decision to proceed with the demerger plan, which had obtained regulatory approval the previous month. On Saturday, July 8, RIL promptly informed the exchanges about this crucial decision. As a consequence, RIL shares became the most active on the exchanges, sparking gains in the frontline indices, namely the S&P BSE Sensex and Nifty50.

The demerger of Reliance Strategic Investments will serve as a catalyst for unlocking value for RIL's extensive shareholder base, comprising a staggering 36 lakh shareholders. RIL, being India's largest company in terms of market capitalization, aims to provide its shareholders with one share of Jio Financial for each share they currently hold in RIL. Notably, the RIL stock has already displayed a 13% increase over the past three months.

According to a regulatory filing by RIL, the Record Date, which is the date determining the equity shareholders of the company entitled to receive the Resulting Company New Equity Shares, has been fixed as Thursday, July 20, 2023. It is worth mentioning that the demerger scheme's effective date is set as July 1.

In a separate development, Reliance Retail, which stands as India's largest retailer and operates as a subsidiary of RIL, announced on Friday that its board had approved a reduction in the company's equity share capital. The reduction will entail the extinguishment or cancellation of all shares, except those owned by the company's holding entity, Reliance Retail Ventures. The shares will be extinguished or canceled at a price of Rs 1,362 each, based on an evaluation conducted by independent registered valuers, as reported by Reuters.

Reliance Retail Ventures currently holds approximately 99.91% of Reliance Retail, while the remaining 0.09% is held by other shareholders, as confirmed by a source with direct knowledge of the matter.