Reliance Industries Limited (RIL) has called a shareholder meeting on May 2 to approve the demerger of its financial services business. The demerger will see the financial services business, which includes Reliance Capital, Reliance Home Finance, Reliance Commercial Finance, Reliance Nippon Life Insurance and Reliance General Insurance, spun off into a separate entity.
The move is part of RIL’s strategy to focus on its core businesses of energy, petrochemicals, retail and digital services. The demerger will also help RIL unlock value for its shareholders by allowing them to invest in the financial services business separately.
The demerger will be implemented through a court-approved scheme of arrangement. Under the scheme, RIL will transfer its financial services business to a new company, Reliance Financial Services Limited (RFSL). RIL shareholders will receive one equity share of RFSL for every five equity shares held in RIL.
The demerger is expected to be completed by the end of June 2021. Once the demerger is complete, RFSL will become a publicly listed company and its shares will be listed on the National Stock Exchange and the Bombay Stock Exchange.
The demerger is expected to benefit both RIL and RFSL. RIL will be able to focus on its core businesses and RFSL will be able to leverage its strong brand name and customer base to grow its business.
RIL shareholders are advised to attend the meeting on May 2 to vote on the demerger. The meeting will be held at the company’s registered office in Mumbai.