Jio Financial Services To Trade As Part Of Nifty 50, Sensex For Three Days Starting July 20
The demerged entity will also be included in the Nifty 100, Nifty 200, and Nifty 500 indices, as well as other sectoral indices.
Jio Financial Services will trade as part of the NSE Nifty 50 for three days starting July 20, a standard procedure for spinoffs.
Reliance Industries Ltd. has demerged its financial services arm, which will be renamed and listed as Jio Financial Services on July 20.
The demerged entity will also be included in the Nifty 100, Nifty 200, and Nifty 500 indices, as well as other sectoral indices, the National Stock Exchange said on Monday.
A pre-open call auction session for RIL will also be conducted for price discovery on July 20 from 9–10 a.m., according to another circular. "All the unmatched orders of the pre-open call auction session within the dynamic price band of the discovered price shall be moved to the normal trading session at their limit price."
However, if equilibrium price is not discovered, all orders will be cancelled, and the stock will continue to trade in the call auction mechanism until equilibrium price is discovered.
Following the successful price discovery on July 20, the stock will be eligible only in the second session of the block deal window on that day's trading session. The stock will trade as part of Nifty 50 for three days in accordance with the index methodology.
Similarly, the Bombay Stock Exchange said that Jio Financial will be added to 18 of the S&P BSE indices, including the S&P BSE Sensex, starting July 20 for a period of three days.
This is on account of Reliance Industries being a part of the Special Pre-Open Session. After three days, it will be dropped from all the S&P BSE indices at the last traded price.
According to exchange methodology, the spun-off business, which is Jio Financial in this case, shall be included in the indices at a constant price.
This constant price is the difference between the closing price of the demerged company, in this case Reliance Industries, one day before the ex-merger date and the price derived during the Special Pre-Open session on the ex-merger date.
Also, if the spun-off business hits the price band on the first two days of the three days, the exclusion date shall be deferred by another three days, according to the methodology.
On Monday, shares of Reliance Industries rose 2.04% as compared with a gain of 0.75% in the benchmark Nifty 50.