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A special 1-hour trading session in Reliance Industries shares will be held on the NSE on Thursday to discover its price as the company hives off its financial services arm. Here’s how a special price-discovery process works and what to expect during Thursday’s session. . .
Do you hold RIL shares?
RIL shareholders will get one share of the demerged entity for every share held by them in the conglomerate. RIL has fixed July 20 as the record date to determine eligible shareholders for the allotment of shares of the demerged entity.
Why a special trading session?
A trading session from 9am to10am has been scheduled to limit volatility in the stock while discovering its price after the demerger process. The price discovered at the end of the session, called preopen call auction, will be the price at which RIL shares will start regular trading on both the exchanges.
How does price-discovery work?
During this session, investors need to place a buy price for the stock (limit order) but are not allowed to put in quantity of shares at the market price (market order). Investors could get the shares at the price they have placed or lower. The weighted average price discovered at 9. 55am is the price at which the stock starts trading in the regularsegment of the exchange from 10am. According to rules of such sessions, in case there are no bids, trading in this special window is extended till a price is discovered.
What to expect in RIL stock?
As RIL is a listed stock, market players have some estimates about its price after the demerger. So they will ascribe that value to the stock and put in their bids. On Wednesday, RIL stock closed at Rs 2,853 on the NSE. So if investors assign a value of Rs 200 to Jio Financial, RIL should start the special session at Rs 2,653.
What about Jio Fin stock?
The approximate price of JioFinancial shares will be: RIL’s closing price on Wednesday minus RIL’s closing price at the end of the special session. Jio Financial shares will be included in Nifty, the sensex and several other indices that have RIL as its constituents from July 20. But this will be a dummy inclusion without any scope for real trading. Regular trading will be possible once shareholders are allotted these shares.
Will this impact the sensex and Nifty?
There won’t be any major impact on these indices after the price of the de-merged stock is discovered. And to limit any adverse impact, Jio Financial stock will be the 51st stock in Nifty and the 31st stock in the sensex till three days after its actual date of listing.
Do you hold RIL shares?
RIL shareholders will get one share of the demerged entity for every share held by them in the conglomerate. RIL has fixed July 20 as the record date to determine eligible shareholders for the allotment of shares of the demerged entity.
Why a special trading session?
A trading session from 9am to10am has been scheduled to limit volatility in the stock while discovering its price after the demerger process. The price discovered at the end of the session, called preopen call auction, will be the price at which RIL shares will start regular trading on both the exchanges.
How does price-discovery work?
During this session, investors need to place a buy price for the stock (limit order) but are not allowed to put in quantity of shares at the market price (market order). Investors could get the shares at the price they have placed or lower. The weighted average price discovered at 9. 55am is the price at which the stock starts trading in the regularsegment of the exchange from 10am. According to rules of such sessions, in case there are no bids, trading in this special window is extended till a price is discovered.
What to expect in RIL stock?
As RIL is a listed stock, market players have some estimates about its price after the demerger. So they will ascribe that value to the stock and put in their bids. On Wednesday, RIL stock closed at Rs 2,853 on the NSE. So if investors assign a value of Rs 200 to Jio Financial, RIL should start the special session at Rs 2,653.
What about Jio Fin stock?
The approximate price of JioFinancial shares will be: RIL’s closing price on Wednesday minus RIL’s closing price at the end of the special session. Jio Financial shares will be included in Nifty, the sensex and several other indices that have RIL as its constituents from July 20. But this will be a dummy inclusion without any scope for real trading. Regular trading will be possible once shareholders are allotted these shares.
Will this impact the sensex and Nifty?
There won’t be any major impact on these indices after the price of the de-merged stock is discovered. And to limit any adverse impact, Jio Financial stock will be the 51st stock in Nifty and the 31st stock in the sensex till three days after its actual date of listing.
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