RIL shares surge over 4% hitting 52-week high on demerger announcement

Demerger of financial services arm expected to unlock value for RIL shareholders

Mumbai: Reliance Industries Limited (RIL) experienced a remarkable surge in its shares, soaring over 4.5% and reaching a new 52-week high of Rs 2,755 on the Bombay Stock Exchange (BSE) in Monday’s trading session. The remarkable increase comes after RIL unveiled its plan to demerge its financial services arm, Reliance Strategic Investments, and rename it as Jo Financial Services (JFSI).

The decision to proceed with the demerger was made during a recent board meeting, following the regulatory approval received last month. RIL officially disclosed this development on Saturday, July 8, while its active trading activity significantly contributed to the upward momentum in the S&P BSE Sensex and Nifty50, leading Indian market indices.


The anticipated demerger is expected to unlock substantial value for RIL’s large shareholder base of 36 lakhs, making it a momentous move for India’s largest company by market capitalization. Shareholders will benefit from the demerger, as they are set to receive one share of Jo Financial for each RIL share owned. The stock has already witnessed a remarkable 13% surge over the past three months, demonstrating growing investor optimism.

RIL, in its regulatory filing, announced that “Thursday, July 20, 2023, has been designated as the Record Date for determining the equity shareholders entitled to receive the Resulting Company New Equity Shares.” The demerger scheme is set to take effect from July 1.

In addition to the demerger news, Reliance Retail, a prominent subsidiary of RIL and India’s largest retailer, disclosed on Friday that its board had approved a reduction in the company’s equity share capital, as reported by Reuters. The plan involves the extinguishment or cancellation of non-Reliance Retail Ventures shares at a price of Rs 1,362 per share, based on independent registered valuers’ assessment.

Reliance Retail Ventures presently holds an approximate 99.91% stake in Reliance Retail, while the remaining 0.09% is held by other shareholders, according to a source familiar with the matter.

The remarkable market response to RIL’s demerger announcement, accompanied by the surge in share prices, reflects shareholders’ growing confidence in the company’s strategic initiatives and its ability to generate enhanced value for its esteemed stakeholders.