Jio Financial Services will now be dropped from Nifty 50 and Sensex effective from August 29, instead of August 24 as indicated earlier, as per Asia Index Pvt Ltd said in a release.
According to the Asia Index report, the major reason behind this is that the stock hit the lower circuit for two consecutive days, soon after listing.
"The index committee has determined to postpone the removal of JFSL from all the S&P BSE Indices by another three days. JFSL will now be removed from all the S&P BSE indices effective prior to the open of trading on Tuesday, August 29," said S&P Dow Jones Indices in a communique to clients.
However, there is no formal confirmation from NSE yet, current methodology for demergers indicate the same.
"In case, during the first 2 days of these 3 days, if the spun off business/ entity hits the price band on both days, then the exclusion date shall be deferred by another three days," NSE Indices had said in its press release on April 26.
As per Navuma Alternative and Quantitative Research, as quoted by Moneycontrol, the combined outflow will approximately be 145-150 million shares, encompassing both Nifty and Sensex.
Meanwhile, Jio Financial will continue to be a constituent of MSCI and FTSE indices. There won't be any fresh buying or selling.
Shares of Jio Financial Services hit the lower circuit in its maiden trading session after listing on Monday. The stock fell by another 5% on the second day, Tuesday, of its trading on the exchange market.
The stock was listed at Rs 265 per share, a marginal premium of over 1% over its derived price of Rs 261.85 on July 20, the date of the company’s demerger.
Its shares were locked at 5 percent lower circuit limit of Rs 239.20 on BSE. In the previous session too, the shares were down 5% from the discovered price of Rs 261.85.
Foreign brokerage CLSA noted that other than a stake in Reliance Industries, liquids worth $2.5 billion have been demerged into JFS that could support a loan book of $13-15 billion.
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JFSL shares have been admitted to dealings on the exchange in the list of T group of securities and the stock will be in the “Trade-for-Trade" segment for 10 trading days. Therefore, no intraday trading will be allowed in JFSL shares. Investors can perform only delivery based buying and selling under T2T Group stock.
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As per the exchanges, JFSL shares will be removed from all indices after three days of listing. According to a report by Livemint, the weakness in Jio Financial Services shares comes amid selling by passive funds tracking indices such as the Nifty and the Sensex.