Jio Financial Services Ltd. increased its stake in Jio Payments Bank Ltd. and infused fresh capital into wholly owned subsidiary Jio Finance Ltd. on Thursday as part of efforts to strengthen its financial services business.
The company subscribed to 8.5 crore equity shares of JPBL at Rs 10 apiece, investing Rs 85 crore. With this, its stake in the payments bank has risen from 82.17% to 85.04%. The investment was made to fund JPBL's business operations and was approved by the Reserve Bank of India, according to an exchange filing.
In another transaction, Jio Financial subscribed to 1.73 crore equity shares of JFL, investing Rs 1,000.2 crore. The subsidiary will use these funds for its business operations.
Both transactions were classified as related-party transactions conducted on an arm’s length with no involvement of the company’s promoters or promoter group, it said.
Jio Financial was added to the Nifty 50 index on Thursday as part of the semi-annual index rejig. This move is expected to bring fresh capital inflows of around Rs 1,714 crore from passive funds, according to Nuvama Alternative & Quantitative Research.
Shares of Jio Financial closed 1.4% higher at Rs 225.78 apiece on the National Stock Exchange, compared to a 0.45% advance in the benchmark Nifty. The stock has fallen 35.62% in the last 12 months and 24.41% on a year-to-date basis.
An analyst from KR Choksey Shares and Securities Pvt. tracking the company has a 'hold' rating on the stock with a target price of Rs 286 apiece, according to data from Bloomberg.
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