Jio Financial Services Makes Strong Recovery, Surges 10% from Intraday Lows

The shares of Jio Financial Services opened the day with a lower circuit of 5% today. The stock commenced trading at Rs 205.15, marking a 5% decrease compared to the previous day’s closing price of Rs 215.90. The stock has been continuously hitting the lower circuit since its listing date. 

Today, around 10:00 AM, it came out from the lower circuit and recovered 10% within just 10 minutes. It marked an intraday high of Rs 224.10 each on the NSE. As of now, while writing this article, the company’s shares are trading at Rs 214 each on the NSE.  

JFS, the financial subsidiary demerged from Reliance Industries Ltd, made its debut on the BSE market at Rs 265 per share, representing a 1.2% premium over its designated price of Rs 261.85 on July 21.  

On its listing date, JFS had a market capitalisation of Rs 1,68,362 crore, but today it stands at Rs 1,33,419 crore. 

The reason why the JFS stock was falling is that Reliance Industries is part of broader indices such as Sensex and Nifty. Recently, the index funds that had Reliance Industries shares in their funds received Jio Financial Services shares in a 1:1 ratio. 

However, Jio Financial Services is not included in any of these indices. Consequently, in compliance with regulations, index funds are required to divest these shares, which is the driving force behind the current selling pressure. 

Due to regulatory restrictions, index funds are obligated to divest from this stock, leading to a selling requirement. 

RIL AGM is going to happen on August 28, investors and analysts alike hope that announcements will be made on the business plans of the newly listed entity. They are anticipating significant synergy benefits from Jio’s connection with the parent company and data-empowered strategies that will shape its path. 

For 10 trading days, the stock will be in the Trade-To-Trade (T2T) segment. Only delivery-based transactions are allowed, and intraday trading is prohibited. The stock will have a 5% circuit filter for the next ten sessions. After the circuit restriction ends, investors can choose to hold or sell the stock. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.