Rs 3,500 Crore Wealth Added In Less Than 15 Minutes: Jio Financial Services Rally 3% Ahead Of RIL's AGM

With Reliance Industries 46th AGM just around the corner, Jio Financial Services witnessed a rally in the opening bell of Monday. The stock has risen by nearly 3% and added more than Rs 3,500 crore of wealth in just 15 minutes of the trade. The NBFC, which is the third largest after demerging with RIL, witnessed extreme selloffs last week with back-to-back lower circuits and billions of dollars of wealth erosion. Traders await announcements related to Jio Financial Services in the AGM.

At the time of writing, Jio Financial stock traded at Rs 213.80 apiece, up by 0.73%. But the stock touched an intraday high of Rs 217.70 crore, rising by at least 2.6% compared to the previous print.

At the intraday high, the company's market cap also crossed Rs 1.38 lakh crore levels. In less than minutes, the stock saw its market cap rise by around Rs 3,506 crore compared to the m-cap of Rs 1,34,789.74 crore on August 25, 2023.

Data from BSE showed that Jio Financial Services saw a huge trade of 306,113 equity shares at the opening bell, around 9.15 a.m. Further, the stock witnessed a large trade of 112,074 shares at 9.17 a.m. as well. In the early trade, more than 9.44 lakh shares were bought, while nearly 1.18 lakh shares were sold. The names of buyers and sellers were not known immediately.

Jio who has been only hitting lower circuits for the majority part of last week, the Monday morning looked cheerful for the stock.

The company listed on August 21 at Rs 265 apiece, up by 1.20% from its fixed price of Rs 261.85 apiece in the pre-market price discovery session which was held last month.

However, since listing day, the stock has struggled as institutional investors offloaded shares. From its listing price to its new 52-week low of Rs 205.15 apiece touched on August 25, Jio Financial shares have nosedived over 22.5% on BSE in five trading sessions. On the intraday day on Friday, the company's market dropped to Rs 1.29 lakh crore at a 1-year low price level, compared to the market cap of Rs 1.66 lakh crore at the listing price on August 21, hence, leading to an erosion of Rs 37,000 crore of wealth since listing.

Shreyansh Shah, Research Analyst, StoxBox feels that the upcoming AGM of RIL will give some rub-off effect in Jio Financial's stock price on optimism of some investor-friendly announcements.

Shah added that as the company has partnered with BlackRock for the Indian asset management services and will be chaired by veteran KV Kamath, the market is optimistic that it will potentially create shareholder value and a further roadmap is expected to be announced in the upcoming AGM of Reliance Industries Ltd. on Monday.

Currently, due to back-to-back lower circuits, BSE announced that the removal of JFSL from all the S&P BSE Indices will be postponed by another 3 days. JFSL will now be removed from all the S&P BSE Indices effective before the opening of trading on Friday, September 01, 2023."

Earlier, Jio Financial was expected to exit from the indices on August 29.

Whether buying is sustainable in Jio Financial Services this week will be keenly watched. Also, any positive announcements from RIL for this financial services company are expected to be a lifting factor.