In a significant move, Life Insurance Corporation of India (LIC) has acquired a 6.66% stake in Jio Financial Services, a subsidiary of Reliance Industries. The shares of Jio Financial Services were listed on both the BSE and NSE on Monday, triggering a consistent downward trend since their listing.
Continuous Circuit Breakers
Both Monday and Tuesday saw lower circuit breakers triggered in the shares of Jio Financial Services. LIC stated that the cost of the takeover through the D-merger with NBFCs on July 19 is 4.68% of Reliance Industries’ pre-D-merger cost.
Market Cap Decline
The shares were listed at INR 265 on Monday, which is a slight premium of more than 1% from its derived price of INR 261.85 on July 20, the day it got separated. The market capitalization of JFSL dipped from INR 1.68 lakh crores to less than INR 1.6 lakh crores when trading commenced.
Intraday Trading is not allowed.
It’s important to note that JFSL shares are part of the ‘T’ group on the BSE, which means they are not eligible for intraday trading. On the second day of listing, Tuesday, JFSL shares on the BSE declined by 5% to INR 239.20. Experts attribute this decline to profit-taking, and they anticipate a potential upswing in the share price in the near future.
Long-Term Investment
For those considering investing in Reliance Industries’ shares, it’s advisable to view it as a long-term investment. The recent decline in share value might be temporary, and there’s hope for future growth.
In conclusion, the LIC’s acquisition of a stake in Jio Financial Services has brought about significant changes in its share price. While it may seem like a rough start, long-term investors may find this an opportune moment to enter the market and potentially reap rewards in the future. Keep a close eye on this partnership as it unfolds in the ever-dynamic world of finance.
