Jio Financial Services Ltd (JFSL), a subsidiary of the Mukesh Ambani-led conglomerate, made a less-than-stellar debut on the stock market this week. The shares were listed at Rs 265 on the BSE and Rs 262 on the NSE, only marginally higher than the discovered price of Rs 261.85 per share. This marks the first listing from the Ambani camp in two decades.
The stock hit an intraday low of Rs 248.90 on the NSE and Rs 251.75 on the BSE, triggering a 5% lower circuit on both exchanges. Market analysts suggest that the fair value of JFSL’s share price is around Rs 150–180 per share, indicating that the stock is currently overvalued. Based on this fair value, the market capitalization of Jio Financial Services would be approximately Rs 1.10 lakh crore to Rs 1.15 lakh crore.
Avinnash Gorakssakar, Head of Research at Profitmart Securities, described the listing as “lacklustre,” stating that the share price had already been discovered at around Rs 260. He added that the company’s future growth targets would remain uncertain unless the market gains insights into its business plans.
Santosh Meena, Head of Research at Swastika Investment Ltd, echoed these sentiments, attributing the subdued listing to higher-than-expected price discovery. He advised long-term investors to hold onto their shares while recommending that short-term investors stay away.
Despite the uncertain short-term outlook, experts remain optimistic about JFSL’s long-term prospects. The company has announced a 50:50 joint venture with BlackRock, the world’s largest asset management company, to enter the $540 billion mutual fund industry in India. Prashanth Tapse, Senior VP of Research at Mehta Equities, remains bullish on JFSL’s long-term prospects due to its focus on consumer and merchant lending, asset management, insurance, payments, and digital broking.
Reliance Industries is set to hold its 46th annual general meeting (AGM) on August 28. Market participants are eagerly awaiting the event, as Chairman Mukesh Ambani has historically made key announcements during AGMs. Investors are particularly interested in learning about JFSL’s game plan in the fast-growing financial services industry.
Jio Financial Services’ debut on the stock market may have been tepid, but the long-term outlook remains promising. With a strong pedigree and an extensive network, the company is well-positioned to make a significant impact in the financial services sector. However, investors are advised to exercise caution and keep an eye on the upcoming AGM for further insights into the company’s future plans.