Jio Financial Services share price is trading at a much higher price than its fair value of around ₹180 apiece, say stock market experts.
After the separation from Reliance Industries Limited (RIL), the share price of Jio Financial Services was listed on the BSE and NSE during the Monday session. However, the listing of JFSL shares on the Indian stock market was sluggish as the share price of Jio Financial Services opened at ₹265 on the BSE and ₹262 on the NSE, which is the same as its market value of ₹261.85 (as per JFSL record date). Nevertheless, the woes for shareholders did not end here and it went further down, reaching ₹248.90 on the NSE and ₹251.75 on the BSE at intraday lower levels – triggering a 5% lower circuit on both exchanges.
Jio Financial Services on the Market
According to stock market experts, the reasonable value for Jio Financial Services’ share is around ₹180, and there is an expectation of further decline in the market price as the stock is currently trading significantly above its fair value. They mentioned that based on the company’s fair value, the market capitalization of Jio Financial Services Limited would likely range from ₹1.10 lakh crore to ₹1.15 lakh crore. Therefore, those who hold JFSL shares in their portfolios are advised to take profits on any uptick in the stock and re-enter at approximately the ₹180 level.
Explaining the reason behind the decline in the share price of Jio Financial Services after listing, Vaibhav Kaushik, a research analyst at GC Broking, said, “The expectation was for a decline in the share price of Jio Financial Services as the stock was trading at a significantly higher price than its fair value. However, the market anticipated that this would happen after touching levels of ₹330 to ₹340. But it seems that index funds have decided to book profits rather than wait for other institutional investors to step in.
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