Shares of Jio Financial Services Limited (JFSL), the demerged financial unit of Reliance Industries Limited (RIL), hit the lower circuit for the fifth consecutive day as index funds continued to sell.
The shares of the company fell 5 per cent on the National Stock Exchange (NSE) to Rs 202.80 apiece soon after opening. Over the past five trading sessions, the value of JFSL shares has reduced by almost Rs 60.
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With this, the company’s market capitalisation has dropped to Rs 1.29 lakh crore.
It may be noted that the shares of Jio Financial Services were to be removed from the key indices after three days of trading, but it was postponed after the shares of the company hit the lower circuit for the first two trading sessions.
Weak run for Jio Financial Services
Shares of the company have been hitting the lower circuit for the past five trading sessions due to selling by index funds, according to experts.
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Manish Chowdhury, Head of Research at StoxBox, told IndiaToday.in that the continuous lower circuit in JFSL’s share price is a result of passive funds selling shares as part of portfolio restructuring.
The postponement of the removal date from major indices by three days indicates that selling pressure is likely to persist for several more trading sessions. It won’t be surprising if the share price falls below Rs. 200 per share, according to Chowdhury.
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Deepak Shenoy, CEO of Capitalmind, noted on X (formerly Twitter) that Jio Financial Services’ shares are declining due to index funds aiming to sell. He described this as “forced selling.”
In response, market experts advise investors to await clarity on Jio Financial’s business strategy and focus areas.
Stoxbox’s Chowdhury suggests treating the company as a new-age business and waiting for strategic clarity. Despite its potential, caution is recommended given the competitive industry landscape and the need to observe on-ground business execution.
