Shareholders of Mukesh Ambani's Reliance approve demerger of Jio Financial Services

Being one of India's largest conglomerates, led by the entrepreneur back on the throne of Asia's wealthiest man, Reliance Industries is expanding into retail, e-commerce and now digital finance. According to reports, Mukesh Ambani's firm already has eyes on an initial public offering for Jio Financial Services before the end of the year in October.

After its shareholders approved the demerger of the finance arm Reliance Strategic Ventures, set to become Jio Financial Services, the firm will reward them with Jio Financial Services stocks.

Overwhelming support from shareholders

According to the group, almost 100 per cent votes were in favour of the demerger, and people who have one share of Reliance Industries are eligible for one share of Jio Financial Services.

Veteran banker and former ICICI CEO, KV Kamath will take over as non-executive chairman of the new entity, which will be listed on the BSE and National Stock Exchange.

What it means for the market

The decision was also welcomed by the markets, since it was followed by a 0.66 jump in RIL's stock prices on Thursday.

With a userbase of 45 crore Jio customers at its disposal, Jio Financial will have an edge against competitors such as Bajaj Finance in the space.

The rise of the financial services arm as a separate entity, is being seen as a major disruption in the sector.