LIC Acquires 6.66% Stake in Jio Financial Services Following Reliance Industries Demerger

• ByStartupStory     |    August 23, 2023

The Life Insurance Corporation (LIC) has acquired a 6.66% stake in Jio Financial Services, a non-banking financial services (NBFC) entity resulting from its demerger from Reliance Industries. In an official statement, LIC disclosed its acquisition of the 6.66% ownership in Jio Financial Services as part of the demerger process carried out by Reliance Industries Ltd. Following its official listing on stock exchanges on August 21, Jio Financial Services has garnered an estimated valuation of nearly Rs 1.60 lakh crore. However, its debut on the market was rocky, as its shares fell by 5% on the opening day, triggering the lower circuit. The stock began trading at Rs 265 per share.

LIC also clarified that the cost incurred to acquire Jio Financial Services amounted to 4.68% of the pre-demerger valuation of Reliance Industries. The trading price of Jio Financial Services shares stood at Rs 239.20 per unit, reflecting a decrease of 4.99% and causing the activation of the lower circuit limit for the second consecutive session on the BSE.

Upon its market debut, the stock started at Rs 265 on the BSE, showcasing a 1.20% rise compared to the value of Rs 261.85 from a special price discovery session held the previous month. However, the stock subsequently experienced a decline of 3.85%, reaching Rs 251.75—the lower circuit limit.

In an unrelated development earlier in the same month, LIC reported a substantial surge in net profit for the April-June quarter, reaching Rs 9,544 crore. This figure marked a substantial increase compared to the net profit of Rs 683 crore reported in the same period of the previous year. Additionally, LIC announced robust growth in its total income for the June quarter, amounting to Rs 1,88,749 crore, a significant rise from the year-ago figure of Rs 1,68,881 crore, as stated in a regulatory filing.

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