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RIL Shares Skyrocket, Unlocking Value through Demerger: What’s Driving the Rally?

Reliance Industries (RIL) Hits 52-Week High as Demerger of Financial Services Arm Nears

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Reliance Industries (RIL) witnessed a surge in its shares, soaring over 4.5% to reach a new 52-week high of Rs 2,755 on the BSE. The driving force behind this rally is the upcoming demerger of RIL’s financial services arm, Reliance Strategic Investments, which will be renamed as Jio Financial Services (JFSL) after the process. The company fixed July 20 as the record date for the demerger, following regulatory approval received last month. This decision, announced after a board meeting, has ignited active trading in RIL shares, propelling the frontline indices S&P BSE Sensex and Nifty50.

Unlocking Value through Demerger: A Game-Changer for RIL Shareholders

The demerger of Reliance Strategic Investments holds the key to unlocking value for RIL’s vast base of 36 lakh shareholders, making it a pivotal moment for India’s largest company by market capitalization. Shareholders will receive one share of Jio Financial for each share they hold in RIL, offering an opportunity for increased value. Notably, RIL’s stock has already witnessed a 13% surge in the past three months, reflecting market confidence in the upcoming demerger.

Record Date and Scheme Details

As per the regulatory filing, the record date for determining the equity shareholders entitled to receive the Resulting Company New Equity Shares has been set as Thursday, July 20, 2023. The effective date of the demerger scheme is July 1, emphasizing the progress of this transformative move.

Reliance Retail’s Equity Share Capital Reduction

In addition to the significant developments related to the demerger, Reliance Retail, India’s largest retailer and a subsidiary of RIL, announced a reduction in its equity share capital. The company’s board approved the cancellation or extinguishment of shares, except for those owned by its holding company, Reliance Retail Ventures. According to Reuters, the valuation by independent registered valuers has determined a price of Rs 1,362 per share for this process. Reliance Retail Ventures holds approximately 99.91% of Reliance Retail, with the remaining 0.09% owned by other shareholders.

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