News

Published: August 23, 2023
Updated: August 23, 2023

"BSE Postpones Removal of Jio Financial Services from S&P BSE Indices Amidst Lower Circuit Slump"

In a strategic move, the Bombay Stock Exchange (BSE) has decided to delay the removal of Jio Financial Services Ltd (JFSL) from all S&P BSE Indices. The announcement comes as a response to the recent dip in JFSL's stock value, which triggered the imposition of lower circuit limits for two consecutive days. This decision reflects BSE's cautious approach towards the spin-off company, following its listing on August 21, 2023, after being separated from its parent company, Reliance Industries.

Postponement due to Market Conditions:

Asia Index Private Limited (AIPL), responsible for managing the S&P BSE Indices, revealed that the removal of JFSL from these indices was initially slated for August 24, 2023. However, in light of JFSL's stock hitting the lower circuit for two consecutive days (August 21 and August 22, 2023), the Index Committee has opted to extend the removal date by an additional three days, now set for August 29, 2023.

Further Contingencies and Communication:

AIPL's circular outlined a clear roadmap in the event of continued lower circuit hits. Should JFSL's stock continue to face lower circuit limitations over the next two days, the removal date will be deferred for another three days. On the other hand, if the stock manages to avoid lower circuit hits in the next two days but experiences it on the third day, the removal date will be pushed back by an additional three days. The circular emphasised prompt communication regarding any postponements and changes to the removal schedule, reassuring stakeholders that updates would be disseminated through established channels.

Stock Performance and Indices Impact:

The recent performance of JFSL's shares has been under scrutiny. On Tuesday, the company's shares experienced a 5% decline, opening at Rs 236.45 and maintaining that price throughout trading hours. This followed a 5% decrease in value during its trading debut on Monday. As JFSL's parent company, Reliance Industries, is a component of the Nifty 50 and Sensex benchmark indices, JFSL's automatic inclusion was anticipated. However, its eventual removal from these indices will be implemented once its stock price stabilises.

In response to the volatility observed in the stock value of Jio Financial Services Ltd, the Bombay Stock Exchange has exercised a thoughtful approach by postponing the removal of JFSL from the S&P BSE Indices. This decision reflects the BSE's commitment to maintaining the integrity of its indices and adapting to market conditions. Stakeholders can expect timely updates on any changes to the removal schedule, underscoring BSE's dedication to transparent communication.