- RIL convened a meeting of shareholders and creditors on May 2 to vote on the split of its financial services company.
- The board of directors of RIL had approved the arrangement whereby shareholders of RIL will receive one share
Joe financial services . - JFS will be a technology-led company and will leverage the network of Reliance’s consumer businesses, said Mukesh Ambani, chairman of RIL.
Billionaire Mukesh Ambani is ready to debut in the world of financial services with Jio Financial Services. JFS will focus on digitally delivering financial products. The first step in this direction was taken with Reliance Industries Limited (RIL) on Thursday, which called for a meeting of equity shareholders, secured and unsecured creditors to vote on the split of its financial services company, Reliance Strategic Investments Limited (RSIL). The meeting will be convened on May 2, according to an exchange filing from the company.
The meeting is convened as per an order from the Mumbai Bench of the Hon’ble National Company Law Tribunal dated March 27, 2023, RIL said.
RIL’s Board of Directors approved the arrangement between RIL and RSIL last October. It had also said that RSIL, which will be renamed Jio Financial Services (JFS), will be listed on Indian stock exchanges.
RIL shareholders will receive one share of JFS shares for one share of RIL shares. “The board approved the entitlement ratio based on the recommendations of the independent appraiser and investment bankers,” RIL said in an October press release.
“JFS will be a technology-driven company delivering financial products digitally by leveraging the nationwide omnichannel presence of Reliance’s consumer business. JFS is uniquely positioned to capture multiple growth opportunities in the financial services industry, bringing millions of Indians into formal financial institutions,” said Mukesh Ambani, chairman and chief executive of Reliance Industries, after the board of directors approved the split.
RIL’s investment in Reliance Industrial Investments and Holdings (RIIHL), a division of RIL’s financial services business, will be transferred to JFS. RIIHL is the beneficial owner of 6.1% RIL shares through its interest in Petroleum Trust and Reliance Services and Holdings.
The former managing director and chief executive officer of ICICI Bank, KV Kamath, will become the non-executive chairman of JFS. JFS has plans to launch a consumer and merchant lending business based on proprietary data analytics to supplement and supplement traditional credit bureau based underwriting.
The company will continue to evaluate organic growth, joint venture partnerships and inorganic opportunities in the insurance, asset management and digital brokerage segments, the company said.
The company said JFS will acquire liquid assets to provide sufficient regulatory capital for lending to consumers, merchants and to incubate other financial services businesses such as insurance, payments, digital brokerage and asset management for at least the next three years of business. The legal licenses for the key companies are in place, the company said.
