Reliance spin-off Jio Financial's share price set well above estimates

The share price of Jio Financial Services (JFS), the demerged financial services unit of Reliance Industries (RELI.NS), was set at a much higher-than-expected 261.85 rupees ($3.19) during a special trading session for the parent company's stock on Thursday.

JFS' share price was calculated as the difference between Reliance's last close and the stock's settling price at the end of the special session. Reliance's stock settled at 2,580 rupees apiece after the session, compared to its close of 2,841.85 rupees on Wednesday.

Analysts had estimated the share price of Reliance Strategic Investments, which will be renamed Jio Financial Services, would be valued at between 160 rupees and 190 rupees per share.

Reliance shareholders are set to get one share of Jio Financial Services for holding one share of Reliance.

The demerger is being seen as oil-to-retail conglomerate Reliance's way to expand its presence in financial services, which it can offer via a non-bank financial company licence it holds.

JFS' access to vast amounts of data from Reliance's telecom and retail businesses will also help the company kick-start lending, analysts have said.

Macquarie Research said the company would likely be an AAA-rated entity that could borrow at attractive rates.

India's two main stock exchanges held a "pre-open call auction" session for Reliance from 9:00 a.m. to 10.00 a.m. IST (0330 to 0440 GMT).

JFS stock will be included in major indices, including India's benchmark Nifty 50 (.NSEI), but will not trade until it is listed.

The listing date is expected to be announced at Reliance's upcoming annual general meeting.

Up to Wednesday, shares of Reliance had surged 8 per cent since the company revealed the record date for the demerger on July 8. It announced the demerger last October.

The stock was trading about 1.4 per cent higher at 10.16 a.m. IST after the special session. It is up 11.6 per cent so far this year, outpacing a 9.5 per cent rise in the Nifty 50.