Reliance Industries (RIL) announced the spin-off of its financial services division into a separate company on October 21, 2022. RIL will de-merge RSIL (Reliance Strategic Investments), and the new company, Jio Financial Services (JFSL), will take its place. JFSL will then be listed on the Indian stock exchanges. This, it claims, will enable the oil-to-telecom behemoth to enter and expand into financial services such as consumer and merchant lending, as well as build fintech for all Indians. RSIL, a wholly-owned subsidiary of RIL, is a Non-Deposit Taking Systemically Important (ND-SI) Non-Banking Financial Company registered with the RBI.
RIL's investment in Reliance Industrial Investments and Holdings Limited (RIIHL), a part of RIL's financial services business, would be transferred to Jio Financial Services (JFSL). JFSL plans to acquire liquid assets to provide adequate regulatory capital while offering lending based on proprietary data analytics to complement and supplement traditional credit bureau-based underwriting and incubate other financial services verticals such as insurance, payments, digital broking, and asset management for at least the next three years of business operations.
Reliance Industries, with over $100 bn in consolidated revenue, operates the country's largest telecom network with over 42 cr subscribers and the country's largest retail chain with over 16,000 stores. According to RIL, the demerger will be accomplished through a share-swap arrangement; no cash will be exchanged; instead, shares will be exchanged. According to the scheme, RIL shareholders will receive one equity share of JFSL with a face value of Rs 10 in exchange for one fully paid-up equity share of Rs 10 in RIL. The company did not specify when Jio Financial would be listed.
Commenting on the demerger of the financial services undertaking, Shri Mukesh Ambani, Chairman and MD, Reliance Industries Limited, said: “JFS will be a truly transformational, customer-centric and digital-first financial services enterprise offering simple, affordable, innovative and intuitive financial services products to all Indians. JFS will be a technology-led business, delivering financial products digitally by leveraging the nationwide omnichannel presence of Reliance’s consumer businesses. JFS is uniquely positioned to capture multiple growth opportunities in financial services bringing millions of Indians into formal financial institutions.”