Read why Jio Financial shares have hit the 5% lower circuit
Jio Financial shares: A Nifty exit for the shared post on the third day of listing could start $290 million outflows, while a release from Sensex could trigger $175 million flows.
Jio Financial shares shot a lower circuit limit in Monday’s trade amid concerns over possible passive outflows following the removal of the stock from crucial share indices in three days.
A Nifty departure for the stock post the third day of listing could start $290 million in outflows. In comparison, a release from Sensex could activate $175 million in inflows, Nuvama Institutional Equities estimated ahead of the stock listing.
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“If, during the first two days of these three days, the spun-off entity hits the price band on both days, then the exclusion date shall be deferred by another three days.”
“After observing two consecutive days of the spun-off entity not hitting the price band, the spun-off entity shall be removed after the third trading day of such observation. If on such a third day spun-off entity again hits the price band, the exclusion of such stock shall not be deferred any more,” Abhilash Pagaria of Nuvama stated.
Nuvama said FTSE had removed the share from its indices and set a zero value as the stock was not listed within 20 business days. “But as it has started trading, the index guys can sell the stock on August 21. This could result in an outflow of $190 million on August 21,” it said.
