Stock market: RIL-Jio Fin demerger begins today – Times of India

A special 1-hour trading session in Reliance Industries shares will be held on NSE on Thursday to gauge its price as the company spins off its financial services arm. Here’s how the special price-discovery process works and what to expect during Thursday’s session. , ,
do you hold RIL share?
Shareholders of RIL will get one share of the separate entity for every share they hold in the group. RIL has fixed July 20 as the record date for determining the eligible shareholders for allotment of shares to the demerged entity.
Why a special trading session?
A trading session from 9 am to 10 am has been scheduled to limit volatility in the stock for its price discovery following the demerger process. The price discovered at the end of the session, called the preopen call auction, will be the price at which RIL shares will start regular trading on both the exchanges.
How does price discovery work?
During this session, investors are required to place a buy price (limit order) for the stock, but they are not allowed to place a quantity of shares at the market price (market order). Investors can get shares at or below the price they held. The weighted average price discovered at 9.55 am is the price at which the stock starts trading in the regular segment of the exchange at 10 am. As per the rules of such sessions, if there is no bid, trading in this particular window is extended till price discovery.
What to expect in RIL stock?
Since RIL is a listed stock, market players have some speculations about its price post demerger. So they will treat that price as stock and place their bid. RIL shares closed at Rs 2,853 on the NSE on Wednesday. So if investors specify a price of Rs 200 Geo FinancialRIL should initiate the special session at Rs 2,653.
What about Jio Fin Stock?
The estimated price of JioFinancial shares will be: Wednesday’s closing price of RIL minus closing price of RIL at the end of the special session. Shares of Jio Financial will be included in Nifty, Sensex and several other indices from July 20 which include RIL as its constituent. But this would be a dummy inclusion without any scope for actual business. Regular trading will be possible after these shares are allotted to the shareholders.
Will it affect Sensex and Nifty?
There will not be any major impact on these indices once the price of the de-merged stock is known. And to limit any adverse impact, Jio Financial stock will be 51st stock in Nifty and 31st stock in Sensex till three days after the actual date of listing.