Isha Ambani, the daughter of billionaire Mukesh Ambani, and former CAG Rajiv Mehrishi have been appointed as directors on the board of the demerged financial services unit of Reliance Industries Ltd. This move comes after the company announced its plans to demerge its financial services undertaking into Reliance Strategic Investments Limited (RSIL) and rename and list it as Jio Financial Services Limited (JFSL).
The new financial services unit will utilize proprietary data analytics to provide lending services to consumers and merchants. It also has plans to expand into insurance, payments, digital broking, and asset management.
One share for every Reliance shareholder
As part of the demerger, every Reliance shareholder will receive one share of the new firm for every share held in the parent company. The demerger is set to be effective from July 1, with July 20 designated as the record day for share allocation, according to the company’s stock exchange filing.
The demerger will create the fifth-largest financier in terms of capital, positioning it as a direct competitor to companies like Paytm and Bajaj Finance. This move will complement Reliance’s existing consumer businesses, including India’s largest wireless operator with over 428 million users and a top retail chain with more than 17,000 stores.
“Reliance Strategic Investments Limited (RSIL) will issue and allot one fully paid-up equity share of RSIL with a face value of Rs 10 each for every one fully paid-up equity share of Rs 10 each of the company to the shareholders whose names are recorded in the register or depository records as of the record date,” stated the company in a stock exchange filing.
Appointment of new directors
The board of directors for the new company, Jio Financial Services Limited, approved the appointment of new directors during a meeting held on July 7. Isha Mukesh Ambani, the elder daughter of the billionaire, was appointed as a non-executive director. Additionally, Reliance executive Anshuman Thakur was appointed as a non-executive director.
Rajiv Mehrishi’s appointment
Former bureaucrat Rajiv Mehrishi, who previously served as home secretary and CAG, has been appointed as an independent director on RSIL for a term of five years. Sunil Mehta, the chief executive of Indian Banks’ Association, and Bimal Manu Tanna, a chartered accountant who previously worked with PwC, have also been appointed as independent directors. The appointment of directors is subject to the approval of members of RSIL and the Reserve Bank of India, and will be effective upon receiving the Reserve Bank of India’s approval.
Hitesh Kumar Sethia, a banker with over two decades of experience in financial services, has been appointed as the managing director and chief executive officer of RSIL for a period of three years. Sethia has a strong background in strategy formulation, market development, compliance, risk management, and team building across multiple countries.
The separation of financial services from the core business of Reliance allows the company to attract strategic partners who are interested specifically in the financial services arm. This move resembles the strategy previously employed with Reliance Jio and tower InvIT, which attracted partners solely focused on those respective businesses.
(with inputs from PTI)
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
