RIL fixes July 20 as record date for share allotment in demerger process

“With the terms of the Scheme, Thursday, July 20, 2023, has been fixed as the Record Date for the purpose of determining the equity shareholders of the Company (RIL) entitled to receive the Resulting Company (RSIL) New Equity Shares,” RIL said in the exchange filing.

It has already set a share exchange ratio of one-for-one. “In accordance with provisions of the Scheme, RSIL shall issue and allot one fully paid-up equity share of RSIL having face value of Rs 10 each for every one fully paid-up equity share of Rs 10 each of the company to the shareholders of the company whose names are recorded in the register of members and / or records of the depository as on the Record Date,” it said.

The total number of shareholders of RIL were 36.39 lakh as on March 2023, according to BSE data.

RSIL said its board of directors had approved the appointment of Hitesh Kumar Sethia as the Managing Director and Chief Executive Officer for three years. The appointment is subject to approval from the Reserve Bank of India (RBI).

Apart from Sethia, RSIL said its board had approved appointments of former finance secretary Rajiv Mehrishi, former head of Punjab National Bank Sunil Mehta and chartered accountant Bimal Manu Tanna as additional directors for five years up to July 6, 2028, subject to the approval from the RBI. They will be designated as independent directors. The board has also recommended the appointment of Mukesh Ambani’s daughter, Isha Ambani, and Anshuman Thakur as non-executive directors.

Sethia was involved with setting up and scaling operations as a key member of the set-up team for lClCl Bank in Canada and as the first employee of lClCl Bank in Germany. He also held senior and country head positions for the IClCl Bank’s operations in the UK and Hong Kong. In his last role at the bank, he was Head of Transaction Banking based in Mumbai.

The company appointed former ICICI Bank Chairman K V Kamath as Non-executive Chairman last year. RSIL is an RBI-registered non-deposit-taking systemically important (ND-SI) non-banking financial company.

Reliance has been developing and fostering a vibrant digital led-financial services platform through various digital applications. JFS plans to launch a consumer and merchant lending business based on proprietary data analytics to complement and supplement the traditional credit bureau-based underwriting.

In a recent note, Macquarie said that after the demerger Jio Financial Services (JFS) could be the fifth-largest financial services company in terms of net worth.

“JFS can be a real threat to fintech business models as well as NBFCs, in our view. JFS not only can offer attractive rates in merchant lending and digital unsecured lending markets, but also be reasonably competitive in the secured lending market eventually, in our view,” Macquarie said in the note.

Jefferies has assigned a value between Rs 134 and Rs 224 per share for Jio Financial Services.

“We value JioFS in the range of Rs 90,000-150,000 crore that implies Rs 134-224 per share in RIL’s sum of the parts (SoTP). We incorporate Rs 179 per share as base case valuation for JFS in our SoTP,” Jefferies said.

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