The anticipation leading up to the listing of Jio Financial Services Ltd (JFSL) shares, following its spin-off from Reliance Industries Limited (RIL), was palpable. However, what unfolded on the stock market was quite different from the soaring expectations. In this blog post, we’ll take a deep dive into the details of JFSL’s muted listing and its implications for investors.
The Muted Listing
The initial excitement in the market took a hit as JFSL shares opened at ₹265 on BSE and ₹262 on NSE. These opening prices closely mirrored the market value of ₹261.85, which had been established on JFSL’s record date. Unfortunately, the disappointment for shareholders didn’t end there. The share price spiraled further, reaching an intraday low of ₹248.90 on NSE and ₹251.75 on BSE. This significant drop triggered a 5 percent lower circuit on both exchanges, leaving many puzzled.
Insights from Market Experts
Market experts have closely monitored this turn of events, and they offer valuable insights. According to their assessments, the fair value of Jio Financial Services share price hovers around ₹180 per share. Their analysis suggests that the stock is still trading well above its fair value, signaling a potential correction in the offing.
Based on this fair value assessment, the market capitalization of Jio Financial Services Ltd would be within the range of ₹1.10 lakh crore to ₹1.15 lakh crore. Given this evaluation, experts are advising shareholders with JFSL holdings to consider capitalizing on any price rebound and perhaps re-enter the market when the share price approaches ₹180 per share.
Deciphering the Nose Dive
But why did Jio Financial Services share price nosedive immediately after its muted listing? Vaibhav Kaushik, Research Analyst at GCL Broking, suggests that the decline was, to some extent, anticipated, considering the stock’s trading price was significantly above its fair value. However, market watchers had initially expected this correction to take place around ₹330 to ₹340 levels. It appears that index funds opted to secure profits rather than waiting for other institutional investors to act.
Investment Strategies
Chandan Taparia, Derivative and Technical Analyst at Motilal Oswal, offers guidance to those who acquired Jio Financial Services shares through allotment. His recommendation is to retain the stock, employing a stop loss at ₹232 apiece levels.
It’s important to note that the equity shares of Jio Financial Services Ltd, formerly known as Reliance Strategic Investments Limited, have been granted trading access on the Exchange and are categorized under the T Group of Securities. The shares will continue to trade in the Trade-for-Trade segment for the next 10 trading days.
As the market reacts and adapts to this development, investors will remain vigilant, observing how Jio Financial Services’ share price unfolds and whether it converges more closely with its fair value in the days ahead
