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New Delhi [India], July 12 (ANI): <keyword id="20043730" type="General" weightage="20" keywordseo="Jio-Financial-Services" source="keywords" meta.keywordsubtype="org" meta.entityname="Jio Financial Services" meta.hostid="261" meta.entityid="Jio Financial Services">Jio Financial Services</keyword> has received the nod from the <keyword id="19899810" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword> (<keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword>) to convert into a <keyword id="20871282" type="General" weightage="20" keywordseo="Core-Investment-Company" source="keywords">Core Investment Company</keyword> (CIC) from a Non-Banking Financial Company (<keyword id="19938496" type="General" weightage="20" keywordseo="NBFC" source="keywords">NBFC</keyword>). The company in an official statement on Thursday stated that "Further to the disclosure dated November 21, 2023, the Company has today received from the Reserve Bank of India approval for conversion of the Company from Non-Banking Financial Company to Core <keyword id="19895437" type="General" weightage="20" keywordseo="investment" source="keywords">Investment</keyword> Company." According to the Reserve Bank of India, a CIC is a specialised NBFC with an minimum asset size of Rs 100 crore. The RBI's circular dated December 20, 2016 stated that, a CIC's main business is the acquisition of shares and securities with certain conditions. One of the conditions stipulated by the central bank is that the CIC holds not less than 90 percent of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies. The transition from an NBFC to a CIC involves several key changes in the company's operational framework. As a Core Investment Company, <keyword id="2003276" type="General" weightage="20" keywordseo="Jio" source="Orion">Jio</keyword> Financial Services will primarily focus on investments in and the management of its subsidiaries companies. The transformation to a CIC structure would enable Jio Financial Services to delineate the financials and operations of each subsidiary, to provide better value discovery for investors. Unlike typical NBFCs, CICs are non-deposit taking financial companies that have their assets predominantly invested in the equity shares, preference shares, or debt instruments of their group companies. As a CIC, the company gains greater operational flexibility. It can now focus on core investment activities without engaging in other financial services. The CICs can explore different sectors and diversify their investment portfolio. This flexibility allows them to adapt to changing market conditions. The shares of the company also surged more than 1.5 per cent during the opening session on Friday, and stands at Rs 353.25 at the time of filing this report. (ANI)

Jio Financials gets RBI nod to become Core Investment Company

<keyword id="19938772" type="General" weightage="20" keywordseo="Reliance-Industries-Ltd" source="keywords" meta.keywordsubtype="org" meta.entityname="Reliance Industries Ltd" meta.hostid="261" meta.entityid="Reliance Industries Ltd">Reliance Industries Ltd</keyword> (<keyword id="20002939" type="General" weightage="20" keywordseo="RIL" source="keywords">RIL</keyword>) is set to hold its much-anticipated 47th Annual General Meeting (AGM) today, August 29, 2024. The AGM, which will be held virtually, is expected to feature some key announcements that could be of great interest to investors as well as shareholders. The meeting will start at 2:00 p.m. IST and will be live-streamed across various digital platforms. Read on to know all about <keyword id="22949345" type="General" weightage="100" keywordseo="Reliance-AGM" source="keywords">Reliance AGM</keyword> and what can be expected from it this year. <h2>What is Reliance AGM?</h2> The Reliance Annual General Meeting (AGM) is an important event where Reliance Industries Ltd (RIL) presents its financial performance, future strategies, and key developments to shareholders and the public. Held annually, this meeting is led by RIL Chairman <keyword id="19916798" type="General" weightage="20" keywordseo="Mukesh-Ambani" source="keywords">Mukesh Ambani</keyword> and serves as a platform for major announcements, including potential IPOs, business expansions, and technological advancements. The AGM attracts widespread attention from investors, analysts, and industry watchers, as it provides insights into the company’s direction and its impact on various sectors. <h2>Where to watch livestream</h2> The AGM will begin at 2:00 p.m. IST and will be conducted virtually, allowing millions of shareholders and investors to join from anywhere. The event will be live-streamed across various digital platforms, including RIL's social media pages on YouTube, X (formerly Twitter), and Facebook. Shareholders can join the live broadcast using the following link: <a href="https://jiomeet.jio.com/rilagm" target="_new">https://jiomeet.jio.com/rilagm</a>. <h2>What to expect from Reliance AGM 2024</h2> IPO announcements: One of the most closely watched aspects of the AGM is the potential announcement of IPO timelines for Reliance <keyword id="19906886" type="General" weightage="20" keywordseo="Jio" source="keywords">Jio</keyword> and Reliance Retail. The possibility of these two giants going public has been a topic of discussion since 2019, and with the five-year mark approaching, investors are keen to hear concrete plans. Energy projects: Reliance’s foray into the green energy sector has been a key focus in recent years. The AGM is expected to provide updates on the progress of the company’s ambitious new energy projects, particularly the development of a large green energy complex in Jamnagar. This complex, featuring giga factories for solar PV, energy storage, and other technologies, is part of Reliance’s broader strategy to transition from traditional energy sources to more sustainable options. Investors will be looking for detailed timelines and potential earnings projections from these ventures. 5G Rollout: Reliance Jio’s 5G rollout is another critical area of interest. The company has already made significant strides in expanding its 5G network across India, and the AGM is expected to shed light on how RIL plans to monetize this infrastructure. This could include potential partnerships, new service offerings like the JioPhone 5G, and strategies to increase subscriber growth. The success of Jio’s 5G rollout will be crucial in maintaining its competitive edge in the rapidly evolving telecom market. AI focus: In addition to its core business areas, Reliance is also expected to make announcements related to artificial intelligence (AI). With global tech giants increasingly focusing on AI, RIL is likely to reveal new AI initiatives tailored to the Indian market. This could include expansions to Hanuman AI, a generative AI tool developed with leading Indian institutions, which supports multiple Indian languages. Succession planning: Another topic of interest is Reliance’s succession plan. With Mukesh Ambani having previously outlined a blueprint for leadership transitions within the company, shareholders will be looking for updates on how these plans are being implemented. The AGM may provide further clarity on the roles of Ambani’s children—Akash, Isha, and Anant—who have been earmarked to lead the telecom, retail, and energy segments, respectively.

Reliance AGM 2024 at 2 pm today: What it is, where to watch, and what to expect

<ul><li>The demerger of <keyword id="15323576" type="General" weightage="20" keywordseo="jio-financial-services" source="Orion">Jio Financial Services</keyword> (JFS) in the coming months and listing on the stock exchanges is a ‘key moment’ for the Reliance Industries’ stock. </li><li>The JFS demerger is expected to act as a catalyst that the parent Reliance Industries was missing, which is evident from the sagging stock price. </li><li>JFS’ entry could also prove to be a challenge to existing players in the space like Bajaj Finance, Paytm and PhonePe, and a successful take off could also result in attrition at banks and non-banking financial companies (NBFC).</li></ul>The <keyword id="17044379" type="General" weightage="20" keywordseo="demerger-of-jio" source="Orion">demerger of Jio</keyword> Financial Services (JFS) in the coming months and listing on the stock exchanges is a ‘key moment’ for the Reliance Industries’ stock, according to analysts at Nomura. Strong fundamentals and business outlook aside, shares of Reliance Industries (RIL) have gone nowhere since March last year. After hitting a fresh 52-week low in March this year, RIL shares are still down over 10% in 2023. The JFS demerger could be just what the parent’s shares need – value unlocking. The JFS demerger is expected to act as a catalyst that the parent Reliance Industries has been missing. “The listing and value unlocking from RIL’s financial services business in the coming months will be a key event for the stock,” said Nomura in its latest note, adding that the decline in Reliance’s shares is due to “index-related sell-off”. According to the terms of the demerger announced in October last year, all existing shareholders of Reliance Industries will get one share in JFS for each share held in the parent company. The company has now <a href="https://www.businessinsider.in/business/corporates/news/ril-calls-for-shareholder-creditor-meeting-to-approve-demerger-of-financial-services-arm/articleshow/99116790.cms">called</a> for a meeting of creditors and shareholders on May 2 for the requisite approvals. JFS is expected to list in September this year. “As JFS scales up, it can drive value unlocking given higher multiples for peers in these industries,” Nomura said. Jefferies has pegged the valuation of JFS in the range of ₹90,000 crore to ₹1.5 lakh crore, with each share of JFS valued at ₹179 in the brokerage’s base case scenario. Demerger to help JFS ‘dominate’ the industry Looking beyond the benefits for RIL’s shares, the JFS demerger will also help the financial services business attract investors and challenge existing players in the sector like Bajaj Finance and Paytm. “The demerger would help the financial services business to attract different sets of investors, strategic partners and lenders having specific interests in the financial services business,” Nomura added. Analysts at Jefferies underlined that JFS would be able to leverage the large distribution network, customer base and deep pockets of Reliance to take on existing players like Bajaj Finance, Paytm and PhonePe, among others. It will also allow JFS to emerge as the fifth largest financial services company in terms of net worth. Reliance has already made several moves to give JFS the best possible start – this includes bringing in KV Kamath, the former non-executive chairman of ICICI Bank, as its chairman. Subsequently, Kamath hired a former ICICI Bank talent, Manish Singh, to help him build a team as JFS draws closer to launch. Analysts are already watching for attrition at banks and non-banking financial companies or NBFCs. JFS to focus on consumers and merchants Leveraging Reliance’s wide reach in consumer and retail segments thanks to Reliance Jio and Reliance Retail, JFS is expected to focus on consumers and merchants as it kicks off its innings post the demerger. “JFS' key advantage will be low funding cost/ better access on the back of the group's high credit rating and ownership of 6.1% stake in RIL,” said Jefferies. Reliance’s retail arm reported<a href="https://www.businessinsider.in/business/corporates/news/reliance-retails-q3-net-profit-up-6-2-at-2400-crore-finance-costs-depreciation-weigh/articleshow/97179758.cms"> 201 million footfalls</a> across its network of 17,225 stores in Q3, which is an increase of nearly 26% year-on-year. Its telecom arm, Reliance Jio, has been the market leader for several months now, with a total subscriber base of 426 million as of January 2023. This gives JFS a strong pool of consumers to dip into. The recent acquisition of<a href="https://www.businessinsider.in/business/corporates/news/reliance-retail-to-acquire-wholesaler-metro-cash-carry-for-2850-crore/articleshow/96415905.cms"> Metro Cash &amp; Carry</a> will also give the company access to 3 million merchants, of which 1 million are frequent buyers. Upcoming Reliance AGM could lay down the blueprint of JFS strategy Reliance is expected to lay down the blueprint of its JFS strategy in detail at its upcoming annual general meeting (AGM), likely in August. This is ahead of the expected listing of JFS in September this year. “While significant efforts are needed to scale the financials business, given RIL’s robust execution, capacity to invest, industry-leading retail infrastructure and leading market share across the retail and telecom industry, it appears likely that RIL will dominate the industry,” said the analysts at Nomura, expressing their optimistic outlook. On the whole, analysts are bullish overall on RIL’s prospects and the JFS demerger, which has earned the company a stock price upgrade from analysts at Jefferies – to ₹3,100 from ₹3,060 earlier. Analysts at Nomura have given a target price of ₹2,850. The recent price correction has also prompted the analysts at JP Morgan to say that this is an<a href="https://www.businessinsider.in/stock-market/news/reliance-shares-down-22-from-all-time-high-attractive-entry-opportunity-says-jp-morgan/articleshow/98725589.cms"> “attractive entry opportunity”</a>. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/reliance-shares-down-22-from-all-time-high-attractive-entry-opportunity-says-jp-morgan/articleshow/98725589.cms">Reliance shares down 22% from all-time high: Attractive entry opportunity, says JP Morgan</a> <a href="https://www.businessinsider.in/finance/banks/news/loan-growth-showing-signs-of-reversal-from-cyclical-highs-but-asset-quality-to-remain-healthy/articleshow/99245377.cms">Loan growth showing signs of reversal from cyclical highs, but asset quality to remain healthy</a> <a href="https://www.businessinsider.in/business/corporates/news/tcs-infosys-hcl-tech-amongst-top-picks-of-analysts-heading-into-the-q4-earnings-season/articleshow/99235686.cms">TCS, Infosys, HCL Tech amongst top picks of analysts heading into the Q4 earnings season</a>

Jio Financial Services demerger and listing a ‘key moment’ for Reliance stock

<ul><li>Market is not rushing to downgrade <keyword id="17277356" type="General" weightage="90" keywordseo="jio-fin" source="Orion">Jio Fin</keyword> rivals just yet, despite its deep pockets and ability to disrupt.</li><li><keyword id="2003276" type="General" weightage="70" keywordseo="jio" source="Orion">Jio</keyword> Fin’s aggression in the unsecured loan business will decide how badly rivals will be impacted in times to come.</li><li>Given that cost of funds for JFS is expected to be significantly lower than other NBFCs, it can price its offerings much better than rivals in consumer finance. </li></ul> A behemoth was born on Monday with the listing of the financial services business of <keyword id="6355199" type="General" weightage="80" keywordseo="reliance-industries" source="Orion">Reliance Industries</keyword> on the exchanges. With the listing of <keyword id="15323576" type="General" weightage="100" keywordseo="jio-financial-services" source="Orion">Jio Financial Services</keyword>, the obvious question is the impact that this entity will have on other listed financial services players because it will take them head on. The obvious assumption is that companies that currently are in the consumer and MSME lending space will be directly impacted. Jio Fin’s rich parentage and high capital base will be its biggest advantage. The net worth of the newborn is higher than its nearest competitor and this will enable it to build a large loan book much faster. But this may not be enough to win in the marketplace as it is a total novice when it comes to underwriting and execution. The market will closely monitor Jio Fin’s aggression in the consumer finance business before downgrading its competitors. For now, the jury is out. Like all other businesses that Reliance has set foot in, even in financial services the market is expecting two things – scale and mega disruption. The first segment that Jio is set to rock first is the lending space. Jio Financial Services ahead of its listing on 18 August released some details on the structure of the company and businesses it would operate in. Jio Financial Services is not just a systemically important non-banking financial institution but also a core investment company (CIC). The RBI has mandated the conversion of Jio Fin into a CIC and NBFC over the next three months. What this essentially means is that all the other businesses will operate under this holding company as subsidiaries. In time, all the subsidiaries could also be listed. The key businesses that Jio Financial Services will be present include: Reliance Retail Finance, Reliance Retail Insurance Broking, Reliance Payment Solutions, Jio Payments Bank, the Asset Management Company will be a joint venture with Blackrock. Reliance Industrial Investments and Holdings will be the sole beneficiary of the 6.1% stake in Reliance Industries. Jio Information Aggregator Services will pursue the account aggregator business, which is yet to commence. Jio Infrastructure Management Services will offer project management services. The first segment that Jio Fin seeks to aggressively pursue is retail lending. The dominant player in this segment is Bajaj Finance, which offers small ticket loans to consumers to buy consumer durables. This business has been mastered by Bajaj Finance over the last decade and a half by tying up with stores like Vijay Sales and Croma. This is where Jio will strike first. Reliance Retail has over 550 digital stores against 517 stores owned by its two rivals Croma (387 stores) and Vijay Sales (130 stores). In merchant lending, its focus is on financing options for merchants in grocery, digital, fashion and pharma formats. According to Nomura, the focus of its MSME lending business will be better geographic penetration. Jio Fin will seek to meet the borrowing needs of small businesses that often resort to high-interest informal channels for small-ticket loans. The company will enter into secured loans in the medium term. Over a period of time Jio Fin will offer unsecured loans too. Sources in the banking industry believe that the new entrant will disrupt the sector with differentiated and cheaper offerings as it can afford to do it because of its strong capital base. The cost of funds of JFS are expected to be significantly lower than other NBFCs. According to Morgan Stanley, “The consolidated entity is starting with a capital base of Rs 114.1 bn as of March 2023 (Rs 193.5 bn ex-book value of RIL stake). If it were to allocate this capital to the lending business, this would likely result in it being among the largest NBFCs by net worth. While this implies significant capacity to lend, we will need to see the pace and mode of execution (organic/inorganic). Hence, the market will closely watch every move JioFS makes.” While the markets believe that Jio will put technology and analytics at the heart of the business, building data will take time. Also, given the competition in the sector, borrowing by consumers is high and that is also leading to higher delinquencies. Therefore, the franchise that Jio builds will matter more than the scale of the loan book. The other issue that analysts see is the capital base of the new entity. Jio Fin as a consolidated entity has a capital base of Rs 114,100 crore or Rs 1.14 trillion as of March 2023 (Rs19,350 crore ex-book value of RIL stake). According to Nomura, if Jio Fin were to allocate this capital to the lending business, this would likely result in it being among the largest NBFCs by net worth. “While this implies significant capacity to lend, we will need to see the pace and mode of execution (organic/inorganic). Hence, the market will closely watch every move JioFS makes,” the report adds.

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Jio Financials gets RBI nod to become Core Investment Company

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Jio Financial Services demerger and listing a ‘key moment’ for Reliance stock

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