Hot stock Jio Financial Services hits the upper circuit on Friday after 5 straight lower circuits– Details Inside!

Reliance Industries announced that its shareholders will receive one Jio Financial Services (JFS) share for every Reliance share they hold on July 20, 2023, a ratio of 1:1.

The Indian stock market closed lower on Friday, with the benchmark indices Sensex and Nifty declining by 0.56 per cent and 0.62 per cent, respectively. About 1,444 shares advanced, 2,200 declined, and 118 remained unchanged on the BSE.
Jio Financial Services stock was listed on August 21, 2023, at Rs 265 apiece on the BSE and Rs 262 per share on the NSE as compared to its discovered price of Rs 261.85 apiece the stock continuously triggered lower circuit limits until Friday's 10:00 am trading session. However, Jio Financial Services surprisingly surged by 5 per cent to Rs 224.10 per share from its prior close of Rs 213.45, emerging as one of the Top Gainers on NSE.

Before we can understand why the stock hit an upper circuit, we need to first understand why it was hitting back-to-back lower circuits:

Reliance Industries announced that its shareholders will receive one Jio Financial Services (JFS) share for every Reliance share they hold on July 20, 2023, a ratio of 1:1. This means that if you held 100 shares of Reliance on the record date, you will receive 100 shares of JFS. Jio Financial Services Ltd (JFSL) shares have been declining for five consecutive sessions due to selling by index funds. Index funds are forced to sell JFSL shares because they are not yet included in the major indices. The selling pressure is expected to continue until JFSL is included in the indices. Investors are awaiting announcements regarding the strategic plans of JFSL at the RIL AGM on August 28, 2023.

A number of mutual funds companies, including State Bank of India, UTI, ICICI, Mirae Asset, Axis Bank, Kotak Bank, HDFC Bank, Aditya Birla, Nippon India, Canara Bank, Quant Funds, Sundaram Finance, Tata Group Funds, HSBC Bank, Life Insurance Corporation of India, etc, acquired shares of JFS.

Now is the time to find out why the stock hit an upper circuit in Friday's trading session at 10:00 AM. I hope you are excited to know the reason!

Motilal Oswal Mutual Fund's purchase of a large number of shares in a single day caused the sudden rise in the stock price. The company purchased 3,72,00,000 or 3.72 crore shares at Rs 202.80 per share, amounting to Rs 7,54,41,60,000 or approx. Rs 754.42 crore. This purchase boosted investor confidence and led to a surge in demand for the stock, driving up the price. Additionally, the stock removal from the Sensex and Nifty Index has been delayed to September 01, 2023.

Currently, JFS has a market cap of Rs 1,36,278 crore. According to the consolidated annual results, the company reported net sales of Rs 45 crore, operating profit of Rs 39 crore and net profit of Rs 31 crore in FY23. Investors should keep an eye on this hot stock.

Disclaimer: The article is for informational purposes only and not investment advice.