The ongoing process of board restructuring and reorganization within the business empire of Mukesh Ambani, the owner of Reliance Industries, continues. In this latest development, Isha Ambani, his daughter, and Rajiv Mehrishi, former CAG (Comptroller and Auditor General), have been appointed as directors on the board of Jio Financial Services Limited (JFSL), the demerged financial services unit of Reliance Industries.
Reliance has previously announced that its financial services platform will separate from Reliance Strategic Investments Limited (RSIL) and become its own independent entity. It will be listed as a separate company.
According to the stock exchange filing, the appointment of directors is contingent upon the approval of RSIL’s members and the Reserve Bank of India. The appointments will come into effect once the Reserve Bank of India’s approval is received.
In addition to Isha Ambani and Rajiv Mehrishi, Anshuman Thakur, a Reliance executive, has also been appointed as a non-executive director. Sunil Mehta, the chief executive of the Indian Banks’ Association, and Bimal Manu Tanna, a chartered accountant who previously worked with PwC, have been appointed as independent directors.
Demerger and Stock Allotment
The demerger is scheduled to take effect on July 1st, and July 20th has been designated as the record day for distributing shares of the new company.
According to the demerger scheme, Reliance Strategic Investments Limited (RSIL) will give one fully paid-up equity share of RSIL, with a face value of Rs 10 each, for every fully paid-up equity share of Rs 10 each held by shareholders.
This distribution will be made to shareholders whose names are listed in the register of members and/or records of the depository on the specified record date.
JFSL intends to utilize Reliance’s technological expertise and concentrate on digitally delivering financial products to India’s 1.4 billion population. Through JFSL and its subsidiaries, services like payments, lending, insurance, asset management, and digital brokering will be provided. The goal of JFSL is to become the fifth-largest financial services company in India.
The spinoff will result in the creation of the fifth-largest financial services company in terms of capital, putting it in direct competition with companies like Paytm and Bajaj Finance. This move will complement Reliance’s consumer businesses, which include the largest wireless operator in India with approximately 428 million users and a prominent retail chain comprising over 17,000 stores.
Analysts also believe that the decision to demerge the financial services platform and establish it as an independent entity is a significant step towards raising additional funds and forming joint ventures with other companies.