Jio Financial Services Ltd (JFSL) recently marked its entry into the stock market after being spun off from Reliance Industries Limited (RIL). However, the debut wasn't as vibrant as anticipated, as the JFSL share price witnessed a muted listing. The opening price stood at ₹265 on BSE and ₹262 on NSE, aligning closely with its market value of ₹261.85 determined on the JFSL record date. Unfortunately, things took a downturn from there, with the share price plunging further and touching an intraday low of ₹248.90 on NSE and ₹251.75 on BSE, leading to a 5% lower circuit on both exchanges.
Financial experts have voiced concerns about the current valuation of Jio Financial Services. According to their assessment, the fair value of the share price is around ₹180 apiece. As the stock continues to trade significantly higher than its estimated fair value, the market is anticipated to further discount it. Based on this valuation, the market capitalization of Jio Financial Services Ltd is projected to fall between ₹1.10 lakh crore to ₹1.15 lakh crore. For shareholders who possess JFSL shares, the suggestion is to seize any opportunity for profit booking during a rebound and consider re-entering the market when the price hovers around the ₹180 mark.
Vaibhav Kaushik, Research Analyst at GCL Broking, elaborated on the reasons behind the share price decline following the muted listing. He stated, "The crash in Jio Financial Services share price was expected due to the stock being significantly overpriced compared to its fair value. However, the market anticipated this to occur after reaching levels of ₹330 to ₹340. Surprisingly, index funds appear to have opted for profit booking rather than waiting for other institutional investors to make their move."
Adding to this viewpoint, the GCL Broking expert explained that the fair valuation of the newly-listed stock indicates a potential decrease in market capitalization to around ₹1.10 lakh crore to ₹1.15 lakh crore. In line with this projection, the share price of Jio Financial Services would likely settle around ₹180 apiece. Given this scenario, he recommended that shareholders consider exiting the stock during any potential rebound.
Chandan Taparia, Derivative and Technical Analyst at Motilal Oswal, advised those who obtained Jio Financial Services shares through allotment to maintain their holdings with a stop loss set at ₹232 apiece levels.
It's worth noting that the equity shares of Jio Financial Services Ltd have been listed in the T Group of Securities on the Exchange. The share price will remain within the Trade-for-Trade segment for the next 10 trading days.
Disclaimer: The perspectives and recommendations mentioned above are those of individual analysts or broking companies and do not represent the views of YouBlog.live. We encourage investors to seek advice from certified experts before making any investment decisions.