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Mukesh Ambani expects to list Jio Financial Services soon

Reliance Industries Ltd. said it expects shares of its financial services business to be listed soon as the conglomerate seeks to propel its recently carved out unit into India’s largest non-banking lender, leveraging the prowess of the digital and retail businesses. Meanwhile, Reliance Industries seeks the appointment of Mukesh Ambani as chief executive for another 5 years at nil salary according to a  company shareholder resolution.

Mukesh Ambani in his message to shareholders in the annual report for the financial year that ended March 31 said,“The new entity is expected to unlock value for shareholders and give them an opportunity to be a part of a new growth platform.”

Reliance Industries last week said it would hold its much-anticipated annual general meeting of shareholders on Aug. 28, where it is expected to give details on the listing of the recently spun-out Jio Financial Services (JFS).

Last month, Reliance demerged JFS, which was valued at around $20 billion after its stock price was set at a much higher than expected 261.85 rupees ($3.19).

Jio Financial Services Limited (JFS) through its operating subsidiaries and joint ventures will offer a broad range of financial services solutions addressing the needs of both consumers and merchants. JFS will use technology as a key enabler to reach customers directly.

According to Bloomberg, this year, analysts are keen to know more about the billionaire’s strategy for his new unit Jio Financial Services Ltd., clean energy and digital businesses. Reliance Strategic Industries Ltd., which will be later renamed as Jio Financial, has been valued at about $20 billion after its shares were spun off last month through a special session conducted by exchanges to discover its trading value.

The newly formed firm, which little revenue as of now but owns 6.1% stake in Reliance Industries, has already announced partnership with BlackRock to set up an Indian asset management venture. “Jio Financial Services aims to provide simple, affordable and innovative digital first solutions,” according to Mukesh Ambani.

Jio Financial and Blackrock are targeting an initial investment of $150 million each in the joint venture, Jio Financial said on Wednesday. The announcement follows the recent demerger of Jio Financial Services from Reliance Industries.

Reliance is also seeking to make Jio Financial Services one of India’s top non-banking finance companies to bolster its presence and creating an empire that’s similar to Alibaba Group Holding Ltd. and Tencent Holdings Ltd. 

Other key points from Mukesh Ambani’s note to investors in the annual report:

  • Reliance will look for the right opportunity to raise capital to support growth plans of its existing as well new businesses while maintaining a keen focus on financial discipline and risk management.
  • Polymer, a key product from its oil-to-chemicals business, is expected to witness strong demand, driven mainly by growth in e-commerce, packaging, durables, automobile and infrastructure segments including pipe makers.
  • Reliance expects global oil demand will remain healthy on the back of steady economic growth, while new fuel supply from upcoming refining capacities in Middle East, China and Africa will likely keep the market balanced.
  • The company said its first ever green hydrogen production was achieved with firing of torrefied biomass in gasifiers during the year ended March. It has already announced plan to set up 20 GW solar capacity for captive needs and said it expects to start transition from gray to green hydrogen in 2025.
  • Reliance undertaking exploration efforts to augment its gas reserves; peak production from its current deepwater fields will contribute about 30% of India’s domestic output

*With inputs from Bloomberg and Reuters

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Updated: 06 Aug 2023, 04:57 PM IST

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