{"id":173334,"date":"2023-03-31T08:37:39","date_gmt":"2023-03-31T08:37:39","guid":{"rendered":"https:\/\/precoinnews.com\/?p=173334"},"modified":"2023-03-31T08:37:39","modified_gmt":"2023-03-31T08:37:39","slug":"ril-shareholders-to-meet-on-may-2-on-demerger-of-financial-services-biz","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/ril-shareholders-to-meet-on-may-2-on-demerger-of-financial-services-biz\/","title":{"rendered":"RIL shareholders to meet on May 2 on demerger of financial services biz"},"content":{"rendered":"
Demerger expected to create a behemoth in financial services space.<\/strong><\/p>\n Abhijit Lele reports.<\/strong><\/p>\n <\/p>\n Lenders and shareholders of Reliance Industries Ltd (RIL) will meet on May 2 to demerge the firm’s financial services business.<\/p>\n This is expected to create a big player in segments including the NBFC (non-banking financial company) space with net worth of Rs 25,851 crore as of March 2022.<\/p>\n According to the plan, RIL shareholders will get a share in the demerged entity for each one held in the company.<\/p>\n After demerger, the shares of Reliance Strategic Investments will be named Jio Financial Services, and will be listed on the National Stock Exchange and the BSE, the company said in a statement.<\/p>\n The meeting is being held following an order by the National Company Law Tribunal, Mumbai Bench.<\/p>\n Elaborating on the rationale for the demerger, the company said financial services were among the multiple businesses carried out by the conglomerate.<\/p>\n Further growth and expansion in financial services would require a differentiated strategy aligned to the industry-specific risks, market dynamics, and growth trajectory.<\/p>\n The nature of financial services is distinct from other businesses and they are capable of attracting a different set of investors, strategic partners, lenders and other stakeholders, it said.<\/p>\n Dwelling on benefits from demerger, it said this would lead to an independent company focusing exclusively on financial services and exploring opportunities in the sector.<\/p>\n A financial services company can have higher leverage for growth and would unlock the value for shareholders of the demerged company.<\/p>\n With emphasis on financial inclusion, the government, as well as regulators, has been developing policies for services including banking, NBFCs, insurance, mutual funds, etc.<\/p>\n According to rating agency ICRA, NBFCs and housing finance companies (HFCs) have embarked on a high growth trajectory compared to the trend in FY2020-22.<\/p>\n Against this backdrop, access to timely and commensurate funding becomes the key, considering the tightening systemic liquidity and current inflationary conditions.<\/p>\n The loan books of retail, NBFCs and HFCs are estimated to grow 13-15 per cent in FY23.<\/p>\n They are expected to touch Rs 30 trillion by March 2024 compared to Rs 23 trillion in March 2022, it added.<\/p>\n Growth could be in the range of 12-14 per cent in FY2024 compared to the average of 8.5 per cent seen during the previous three financial years.<\/p>\n