RIL Shares Jump Over 4%, Hitting a 52-Week High. What’s Behind The Rally?

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Reliance Industries (RIL) shares jumped over 4.5% to hit a fresh 52-week high of Rs 2,755 on the BSE in Monday’s trade after the energy-to-telecom conglomerate fixed July 20 as the record date for the demerger of its financial services arm Reliance Strategic Investments, which would later be renamed as Jio Financial Services (JFSL).

RIL shares jump over 4%, hitting a 52-week high. What's behind the rally

The decision to this effect was taken at a board meeting of the company on Friday after getting regulatory approval on the demerger last month. RIL informed the exchanges about the decision on Saturday, July 8.

RIL shares were the most active on the exchanges and triggered the gains in the frontline indices S&P BSE Sensex and Nifty50.

The demerger will unlock value for the 36 lakh-strong shareholder base of RIL, India’s largest company by market capitalization. As part of the plan, RIL shareholders will get one share of Jio Financial for every share they own of RIL. The stock is already up 13% in the last three months.

“In accordance 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 entitled to receive the Resulting Company New Equity Shares,” RIL said in a regulatory filing, adding that the effective date of the demerger scheme is July 1.

In another development, Reliance Retail, India’s biggest retailer and a unit of RIL said on Friday that its board has approved reducing the company’s equity share capital Reuters reported.

Reliance Retail said that except for the shares owned by its holding company, Reliance Retail Ventures, the rest of the stock will be extinguished or canceled at a price of Rs 1,362 each on the basis of a valuation from independent registered valuers, the report said.

Reliance Retail Ventures holds about 99.91% of Reliance Retail and 0.09% is held by other shareholders, a source with direct knowledge of the matter said.

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