Shares of Jio Financial Services Ltd, the recently spun-off arm of tycoon Mukesh Ambani-led Reliance Industries Ltd, dropped over 5 per cent in its market debut on NSE on Wednesday.
Jio Financial Services, promoted by RIL’s subsidiary Reliance Retail Ventures Ltd, saw its scrips open at Rs 383.5, slightly lower than its issue price of Rs 400 per share on the National Stock Exchange (NSE). The shares eventually slumped 5.25 per cent to end the day at Rs 378.95 under bearish sentiments.
Jio Financial Services, formerly known as Reliance Commercial Finance Ltd, is the first publicly-listed non-banking financial services company in the country. It provides loans to consumers and small business owners, using technology-backed lending platforms and insights. It has also diversified its offerings into working capital finance, home loans, property brokerage, wealth management and insurance services.
RIL had in April announced the spinoff of its financial services and insurance business into a separate company to be listed on the stock exchanges. It has since sold its entire 84.50 per cent stake in Jio Financial Services Ltd to the public through an initial public offering (IPO).
The IPO opened for subscription on April 14 and closed on April 16. The issue constituted a fresh issue of equity shares aggregating to Rs 5,000 crore and an offer for sale of up to 5 crore equity shares.
The offer has received an overwhelming response from investors. The qualified institutional buyers (QIBs) portion received bids for almost 6 times the number of shares on offer while the non-institutional investors quota was any subscribed by 2.1 times.
Analysts believe that the bullish sentiment around the stock will continue in the medium and long term despite the dip on market debut. They expect the stock to gain traction in the near future supported by strong fundamentals of the company as well as its parent firm RIL.
Jio Financial Services Ltd will be looking to capitalize on the expanding and clubbed services of the apex fintech companies to gain a strong foothold in the space. With RIL’s aggressive spending plans in its retail and telecom businesses, the company is well poised to take advantage of the growing digital payments transportation and logistics sector in India.
Despite the plunge today, investors should keep their faith in the stock as the fundamentals of the company remain intact. The outlook for Jio Financial Services Ltd should remain positive in the long term given its strong presence in the retail and consumer finance space.
