After being spun off from Reliance Industries Limited (RIL), Jio Financial Services (JFSL) marked its share price debut on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) during Monday’s trading session. Nonetheless, JFSL shares experienced a subdued entrance into the Indian stock market, with their initial prices opening at ₹265 on the BSE and ₹262 on the NSE. These values closely mirrored the market valuation of ₹261.85 that had been established on the JFSL record date. Regrettably, for investors, the challenges didn’t conclude there, as share prices continued to slide, reaching intraday lows of ₹248.90 on the NSE and ₹251.75 on the BSE, activating a 5 percent lower circuit on both exchanges.
Financial analysts suggest that the equitable valuation for Jio Financial Services’ stock price would hover around ₹180 each. Currently, the market appears to be assigning an excessive value to the stock, and experts foresee forthcoming price adjustments to realign with its rightful value. They propose that considering this valuation, Jio Financial Services Ltd’s market capitalization should range between ₹1.10 lakh crore and ₹1.15 lakh crore. As a result, shareholders who retain JFSL shares in their portfolios are advised to leverage any price rebounds and contemplate reentry into the market when prices reach approximately ₹180 per share.
Addressing the factors behind the decline in Jio Financial Services’ share price post its lackluster listing, Vaibhav Kaushik, a Research Analyst at GCL Broking, clarified that the stock’s decline was anticipated due to its elevated price relative to its intrinsic value. However, the market had expected this adjustment to occur around the ₹330 to ₹340 price range. It appears that index funds opted to secure profits rather than await actions from other institutional investors.
Read also: Understanding and Addressing the Risks of Spurious Liquor | UPSC
The GCL Broking expert further underscored that the equitable valuation of the recently listed stock indicates a reduction in its market capitalization within the range of ₹1.10 lakh crore to ₹1.15 lakh crore. Given these circumstances, Jio Financial Services’ share price could potentially decline to approximately ₹180 per share. He suggested that JFSL shareholders contemplate exiting the stock during any price rebound.
Discussing the listing of Jio Financial Services shares, Chandan Taparia, a Derivative and Technical Analyst at Motilal Oswal, recommended that those who obtained JFSL shares through allotment should hold onto their holdings and set a stop loss at ₹232 per share.
It\’s noteworthy that the equity shares of Jio Financial Services Ltd, previously recognized as Reliance Strategic Investments Limited, have been incorporated in the Exchange’s roster of T Group of Securities. The share price of Jio Financial Services Ltd will be included in the Trade-for-Trade segment for a duration of 10 trading days.