October 22, 2022
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Reliance Industries to demerge & list financial services business
Shareholders to get one share of Jio Financial for every share held in Reliance,
Ready to compete with Google Pay, Paytm
RIL announced flat profits in Q2
Reliance Industries has announced the demerger of its financial services business into a separate entity and will list it on the stock exchanges under the name Jio Financial Services.
The financial services business, currently under Reliance Strategic Investments, will be demerged.
The turnover of the financial services business as of March 31, 2022, was Rs 1,387 crore or 0.3 percent of the total turnover of Reliance.
The demerger will be done through a share-swap arrangement, and no cash will be involved, the company said in a statement. Reliance shareholders will get one share of Jio Financial Services for every share held in Reliance by them.
The board of directors of RIL, at its meeting held today, approved a scheme of arrangement amongst RIL, Reliance Strategic Investments Limited (RSIL) and their respective shareholders and creditors in terms of
“JFS is uniquely positioned to capture multiple growth opportunities in financial services bringing millions of Indians into formal financial institutions,” said Mukesh Ambani, chairman and managing director, RIL.
According to the market analysts, the company is expected to compete with GooglePay, AmazonPay, PayTm and in the second stage, may enter into banking sector, since the government is expected to offload/disinvest its stake in IDBI Bank, Bank of India etc.
RIL Q2 consolidated net profit flat on-year at Rs 13,656 crore.
Reliance Industries on October 21 reported a consolidated net profit of Rs 13,656 crore for the quarter ended September as against Rs 13,680 crore in the year-ago quarter.
Revenues at the petrochemical major surged 33.7 percent to Rs 2.32 lakh crore, led by strong performance of the oil-to-chemical, telecom and retail operations in the quarter. The company’s consolidated operating profit in the quarter, including the impact of special additional excise duty imposed by the government in July, surged 14.5 percent on-year to Rs 34,663 crore, RIL said.
Debt: Its overall outstanding debt as on September 30, 2022, was at Rs 2.94 lakh crore while cash and cash equivalents stood at Rs 2.01 lakh crore. Net debt, therefore, rose to Rs 93,253 crore.
RIL’s debt increased in the quarter due to higher working capital given the significant dislocation in energy markets, impact of foreign currency liabilities as rupee depreciated against the US dollar and payment of first installment for spectrum,
OtoC: The oil-to-chemical business of RIL saw strong growth in topline with sales jumping 32.5 percent on-year to Rs 1.6 lakh crore. However, the segment’s operating profit fell 5.9 percent on-year to Rs 11,968 crore owing to decline in global refining margins and government’s special excise duty.
Jio Digital: The digital services business of RIL, which included Reliance Jio, had a strong quarter on a sequential basis.
The segment’s operating profit jumped 5.1 percent on a quarter-on-quarter basis to Rs 12,011 crore, aided by strong addition of new customers and benefit of recent tariff hikes at the telecom subsidiary.
Reliance Jio added net new subscribers to the tune of 7.7 million in the September quarter, taking the total user base to 427.6 million as of September 30.
The operating margin of the digital services business also saw a marked improvement to 49.5 percent in the reported quarter from 48.7 percent in the previous quarter.
Retail: The organised retail segment had a record quarter, aided by the full re-opening of the domestic economy post the COVID-19 related restrictions seen through large parts of 2021-22.
The segment’s revenues jumped 44.5 percent on-year to Rs 57,694 crore in the reported quarter, which was aided by strong new store additions and footfalls. RIL said it received over 180 million footfalls in the September quarter, which was a 23 percent jump over pre-COVID-19 levels.
During the quarter, the company opened 795 new stores to take the total store count to 16,617.
“The quarter was marked by an operating environment at par with pre-COVID levels as the impact of pandemic waned,”
