Shares of Jio Financial Services Limited (JFSL) fell 5 per cent to hit the lower circuit for the third consecutive trading session on Wednesday.
JFSL shares fell 5 per cent on the Bombay Stock Exchange (BSE) to Rs 227.25 apiece. On the National Stock Exchange (NSE), the stock fell to Rs 224.65 per share.
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In the past 3 trading sessions, the stock has lost 15 per cent of its value, with market capitalisation falling to Rs 1.43 lakh crore.
The removal of JFSL shares from the key benchmark indices has been deferred as it hit the lower price limit for two consecutive days. The stock will now be removed from the Sensex and Nifty on August 29.
Why are JFSL shares falling?
JFSL shares have been hitting the lower circuit for the past three trading sessions, despite optimism surrounding the demerged entity’s market listing.
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According to stock market analysts, JFSL shares have been on a losing run due to selling pressure from institutional investors.
Manish Chowdhury, Head of Research, StoxBox, said, “The share price of Jio Financial Services has been hitting the lower circuit of 5 per cent for the last three days, mainly attributed to the selling of shares by passive funds in a bid to restructure their portfolios.”
“With the removal date from major indices deferred by three days, we expect selling pressure to continue for a few more trading sessions and won’t be surprised to see the share price falling below Rs. 200 per share levels,” Chowdhury said.
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“We advise investors to treat the company as a new-age business and wait for clarity on their strategy and key focus areas. Though the company has a large market opportunity and is from the stable of the largest business conglomerate in India which has a history of disrupting businesses, it would be prudent to be on the sidelines to see the business execution on the ground, especially in a very crowded and competitive industry space,” he added.
