Reliance - JFSL Demerger FAQs
1. What is the record date of the demerger?
The record date for the demerger is Thursday, 20th July, 2023.
2. How will the demerger affect my holdings in Reliance?
Your present holding in Reliance will remain intact. As per the allotment ratio of 1:1, you will get 1 share of Reliance Strategic Investment Limited (RSIL). RSIL will be renamed as Jio Financial Services Limited (JFSL).
3. If I want to participate in the demerger, when should I buy Reliance?
The record date for the demerger is 20th July 2023. So in case you wish to participate in the demerger, you can buy Reliance Industries on Wednesday 19th July 2023. On the contrary, if you do not wish to participate in the demerger, you can sell your holdings on Wednesday 19th July 2023,
4. What will happen to my MTF Position in Reliance?
Your MTF Holding will remain intact. However, the margin requirement may increase on your MTF position due to price adjustment of Reliance post demerger. You will be required to maintain sufficient margins.
5. What will happen to newly allotted JFSL shares against existing Reliance bought under MTF ?
Currently, JFSL shares are not listed, not traded and not approved under MTF. Upon receipt of JFSL shares in your demat account, those will continue to remain pledged under MTF and will be unpledged subsequently. .
6. What will happen to my Derivatives position?
The existing F&O contracts of July 2023, August 2023, and September 2023 will pre-expire on July 19, 2023, and shall be physically settled. New F&O contracts will be re-introduced from July 20 onwards.
7. What will happen to my Derivatives position if Reliance is given as collateral?
Again nothing to worry about. If Reliance is given as a collateral against any derivatives position, you may receive a margin call due to lowering of the pledge value due to price adjustment of Reliance post demerger, and subsequently you have to provide the required margin to continue holding your derivatives position.
8. When will the new shares of JFSL be credited to my Demat and how will I be aware of it?
In case of mergers & demergers, usually it takes around 30 to 45 days for the credit of shares. However, in this case, this may happen sooner. You’ll receive an email from CDSL once the shares are credited to the demat account.
9. In case my Reliance Shares were pledged before the demerger, what will be the impact post demerger ?
If your Reliance shares were already pledged for margin or MTF, the newly allotted shares of JFSL will be auto pledged under margin/MTF and will be communicated by CDSL. However, as the credited shares will not be listed, the same shall be unpledged subsequently from our end and no further action would be required from your side.
10. What will be the price of Reliance post demerger?
NSE will be conducting a special pre-open session for Reliance on July 20 (circular) for price discovery. Reliance is a part of NIFTY50 and other Indices too. The separation of the financial services business will impact the price of Reliance as well. Further, the demerged entity will also be a part of 19 Indices by NSE (Refer here.)
11. When will the allotted shares start trading on the exchanges?
JFSL is currently not listed on exchanges for trading. After the credit of shares, the company (JFSL in this case) has to take approval from the exchanges to list their shares. Post the approvals are received the shares will start trading on the exchanges. The timelines for this are currently not available.
12. What will be the average price for allotted shares of JFSL?
The company publishes a document on how to compute the Cost of Acquisition generally after the record date. We’ll update the post once we have an update on this. However, mathematically the average price of allotted JFSL will be computed as % of stake it had in Reliance Industries.
13. I can see some news articles and publications showing the tentative price of JFSL. How do they compute this?
As per news sources, the percentage stake of JFSL is around 6.1%. Hence, the cost of acquisition of JFSL will be 6.1% of the total cost price of Reliance. For example, if you had bought reliance at Rs. 2800, the cost price of JFSL would be 6.1% of 2800 = Rs. 170.80 and hence, the new price of Reliance would be Rs. 2,800 - 170.80 = Rs. 2,629.20. This information has been given for illustration purposes only. The same should not be construed as recommendation or indication of the price of JFSL.