RIL sets July 20 as record date for Reliance Strategic Investments demerger

The company said on Saturday that the daughter of billionaire Mukesh Ambnai Esha and former CAG Rajiv Maharishi are among the directors appointed to the board of Reliance Industries Ltd.’s separate financial services unit.

Reliance had previously announced plans to spin off its financial services business into Reliance Strategic Investments Limited (RSIL) and rename and list it as Jio Financial Services Limited (JFSL). It will lend to consumers and merchants based on proprietary data analytics and eventually branch out into insurance, payments, digital brokerage and asset management.

Each Reliance shareholder will receive one share of the new company for every share held in the parent company.

While the actual date of the separation was set for July 1, July 20 was set as the standard day for the new company’s stock allotment, according to a company filing on the stock exchange.

The subsidiary, which will create the fifth-largest financier by capitalization and compete directly with the likes of Paytm and Bajaj Finance, will complement Reliance’s consumer businesses, which include India’s largest wireless operator with around 428 million users, and a major retail chain with over 17,000 stores.

“In accordance with the provisions of the (de-merger) scheme, Reliance Strategic Investments Limited (RSIL) will issue and allocate one fully paid share of RSIL of a nominal value of Rs 10 each for each fully paid equity share of Rs 10 per company to the shareholders of the company whose names are registered in Member register and/or depository records as on the date of registration,” the company said in an exchange filing.

The board of directors of the new company, in a meeting held on July 7, approved the appointment of new board members. Isha Mukesh Ambani, the billionaire’s eldest daughter, has been appointed as a non-executive director. Besides, Anshuman Thakur, CEO of Reliance, has been appointed as Non-Executive Director.

It said former bureaucrat Rajeev Mehrishi, who served as home minister as well as CAG, had been appointed as an independent director at RSIL for a five-year term. Sunil Mehta, CEO of the Association of Indian Banks, and Bimal Manu Tanna, a chartered accountant who has worked with PricewaterhouseCoopers, have also been appointed as independent directors.

“The appointment of directors is subject to the approval of the members of the RSIL and the Reserve Bank of India and will be effective from the date of receipt of the approval of the RBI,” the application said.

Banker Hitesh Kumar Sethia has been appointed as Managing Director and CEO of RSIL for a period of three years.

Hitesh Sethia is a Financial Services Executive with over two decades of experience across Europe, Asia (India and Greater China) and North America. He has spent most of his career at ICICI Bank gaining functional experience and holding leadership roles in various departments such as Credit, Banking for individuals, corporate and transaction banking along with an understanding of the technology’s applications in financial services, said the filing, which provided a brief profile of the new CEO.

Sethia brings rich experience in the areas of strategy formulation, market development, compliance, risk management and team building across multiple countries, and has been involved in setting up and scaling operations as a key member of the preparation team for ICICI Bank Canada, and as the first employee of ICICI Bank in Germany. He has also held senior/key country positions for ICICI Bank’s UK and Hong Kong operations. In his last position with the bank, he was Head of Transaction Banking in Mumbai.

According to brokerage BofA Securities, by separating financial services from the core business, Reliance appears to be keeping pure business transactions out of other entities, and in theory better helps them attract strategic partners or JV partners only keen in the financial services arm – like they did with Reliance Jio or InvIT tower.