The removal of shares of Jio Financial Services, the demerged financial services arm of Reliance Industries Ltd., has been delayed for another three days to August 31. The stock will now be removed from the indices before opening of trading on September 1.

Share Market Live

NSE

This comes after the stock opened in a 5 percent lower circuit for the fifth day in a row before recovering 10 percent from the lows. The stock is currently swinging between gains and losses.

The stock had fallen to as low as Rs 202 from its pre-listing discovered price of Rs 261.85.

Since listing, the stock has been trading in the Trade-To-Trade (T2T) segment, under which shares can only be purchased through the delivery mechanism and not on an intraday basis.

Jio Financial Services was supposed to be excluded from the Sensex and Nifty indices on Wednesday, August 23. However, after three consecutive lower circuits, the indices delayed the removal date to after closing on August 28. Wednesday was the third day after listing for Jio Financial Services.

However, the BSE caveat said that in case the stock ends in a lower circuit for the next two sessions as well, the removal date will be deferred by another three days.

Additionally, in case the shares do not hit a lower circuit on either of the two days but end on a lower circuit on the third day, the removal will be deferred by another three sessions.

Shares have now remained in a lower circuit on all three days post the announcement of the delay.

But Why Are The Shares Falling?

According to market expert Hemang Jani, "There are certain technical factors —almost about 3.5 to 4000 crore selling is happening because of the selling by the index funds, at the same time you will see buying because of the inclusion in the MSCI and a couple of global indices. This will happen probably over next, let's say 3 to 5 day period. So short-term, the stock could remain a bit subdued."

"But I don't see much of a downside from current levels because of the fact that the market cap is around 1,60,000 crore, and the way the entire opportunity is coming up and the way the company has gone about building the team, the way the business plans are going to unfold, so I think for, let's say 2 to 3 years, this could be a great opportunity," he said.

"When a stock is expected to move to high volatility, it is put under trade-to-trade. The volatility in JFSL was expected since institutional selling was on the cards and interested buying too was expected. The volatility seen in the stock after listing justifies the decision to move the stock to the T segment. Investors who are optimistic about the stock can buy from the market for delivery without any restrictions," VK Vijayakumar of Geojit Financial Services said.

First Published:Aug 25, 2023 10:12 AM IST