Reliance Industries Ltd announced on July 6 that the National Company Law Tribunal (NCLT) has given its nod to the demerger of the company’s financial services undertaking and its listing.
Reliance had previously announced plans to demerge its financial services undertaking into Reliance Strategic Investments Limited (RSIL) and rename and list it as Jio Financial Services Limited (JFSL).
“We wish to inform you that the National Company Law Tribunal, Mumbai Bench (NCLT), vide its order dated June 28, 2023, has sanctioned the Scheme,” Reliance Industries said in a regulatory filing to the stock exchanges.
The oil-to-telecom conglomerate stated that the company will now take necessary steps for the demerger. “The company and Reliance Strategic Investments Limited will take necessary steps including fixing the record date for allotment and listing of equity shares of Reliance Strategic Investments Limited,” said Reliance without giving timelines for the same.
Global brokerage, BofA Securities, believes that Reliance Industries Ltd’s revenues and earnings before interest, taxes, depreciation, and amortisation (EBITDA) will drop quarter over quarter (QoQ) in Q1FY24 (April to June), primarily due to oil-to-chemicals O2C business, which will be partially offset by continued steady growth in retail and telco business.
According to the brokerage firm, by separating financial services from the core business, Reliance appears to be keeping arm’s length transactions from other entities, and in theory helping them better to attract strategic or JV partners who are keen only in financial services arm-like what they did with Reliance Jio or tower InvIT.
The global brokerage firm estimates that the bottom line will drop by 16% from the March quarter and 10 per cent year over year to ₹16,160 crore. EBITDA will decrease by 1 per cent both sequentially and annually. The consolidated revenue could drop by 7 per cent year over year and 4 per cent sequentially to ₹2.08 lakh crore.
