Jio Financial Services, the separated entity of Reliance Industries, has formally requested approval from the Reserve Bank of India (RBI) to transition from a non-banking financial company (NBFC) to a core investment company (CIC), aligning with regulatory directives. As communicated in a November 21 exchange filing, the application is aimed at adjusting the company’s shareholding structure and control post-demerger from Reliance Industries, in accordance with RBI guidelines.
CICs, under RBI regulations, are entities primarily investing their assets in group companies, encompassing equity, preference shares, convertible bonds, or loans. These companies serve as passive holding entities focused on maintaining control over their group companies, refraining from engaging in other financial activities. To qualify, a CIC must meet conditions including holding at least 90 percent of its net assets in the form of investments in group companies and not trading its investments except for block sales. Additionally, it should only undertake activities such as granting loans to group companies, issuing guarantees, and investing in specified financial instruments.
Responding to reports suggesting a potential bond issuance of up to Rs 10,000 crore, Jio Financial Services denied these claims. Refuting the speculation, the company asserted its commitment to compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and agreements with stock exchanges. The September quarter reflected a significant 101 percent sequential increase in the company’s net profit, despite an 8.6 percent decline in interest income.
As of 9:43 am, the company’s stock traded at Rs 221.25 on the NSE, marking a 0.48 percent increase from the previous close. Over the past month, the stock has demonstrated a 2 percent rise, outperforming the 0.8 percent increase observed in the benchmark Sensex.
