Mukesh Ambani’s daughter Isha, former CAG Rajiv Mehrishi appointed directors on RIL’s financial services unit

Mukesh Ambani’s daughter Isha, former CAG Rajiv Mehrishi appointed directors on RIL’s financial services unit

Reliance Industries Limited (RIL) has announced the appointment of directors for the demerged financial services unit. Isha Ambani, the daughter of billionaire Mukesh Ambani, and Rajiv Mehrishi, the former Comptroller and Auditor General (CAG), are among the directors appointed to the board.

As part of its plans to restructure its financial services business, RIL will demerge the undertaking into Reliance Strategic Investments Limited (RSIL) and rename it Jio Financial Services Limited (JFSL). JFSL will focus on providing lending services to consumers and merchants based on proprietary data analytics. It aims to expand its offerings to include insurance, payments, digital broking, and asset management in the future.

Under the demerger plan, every shareholder of Reliance Industries will receive one share of Jio Financial Services Limited for each share held in the parent company. This allows existing shareholders to participate in the new entity’s growth and potential.

The appointment of directors, including Isha Ambani and Rajiv Mehrishi, reflects the company’s commitment to bringing in experienced and influential individuals to guide the strategic direction and operations of Jio Financial Services Limited. With their expertise and leadership, the company aims to build a solid and successful financial services business that leverages technology and data analytics to cater to the evolving needs of consumers and businesses.

The demerger of Reliance Industries’ financial services unit into Jio Financial Services Limited (JFSL) has been scheduled for July 1, with July 20 designated as the record day for allocating shares of the new company. This move aims to create the fifth-largest financier in terms of capital and positions JFSL as a direct competitor to companies like Paytm and Bajaj Finance.

The demerger of the financial services unit will complement Reliance’s existing consumer businesses, which include India’s largest wireless operator with approximately 428 million users and a leading retail chain with over 17,000 stores. With JFSL’s entry into the financial services sector, Reliance Industries seeks to leverage its extensive customer base and retail network to offer various financial products and services.

The establishment of JFSL as a separate entity will enable focused growth in the financial services space, leveraging Reliance’s strengths in data analytics, technology, and customer insights. By tapping into proprietary data and utilizing advanced analytics, JFSL aims to provide innovative lending, insurance, payment, digital broking, and asset management solutions to cater to customers’ evolving needs.

This demerger reflects Reliance Industries’ strategy to expand its presence in the consumer and financial services sectors, capitalizing on its existing ecosystem and customer relationships. With the demerged entity, Reliance aims to drive synergies between its various businesses and create value for its shareholders while offering enhanced financial services to its customer base.

As per the demerger scheme, Reliance Strategic Investments Limited (RSIL) will issue one fully paid-up equity share of RSIL with a face value of Rs 10 each for every fully paid-up equity share of Rs 10 each held by the shareholders of Reliance Industries. This issuance will be made to the shareholders whose names are recorded in the register of members and/or records of the depository as of the record date, which has been set as July 20.

In a recent stock exchange filing, Reliance Industries announced that the board of directors of the new company, Jio Financial Services Limited (JFSL), approved the appointment of new directors. Among the directors appointed are Isha Ambani, daughter of billionaire Mukesh Ambani, and Rajiv Mehrishi, former Comptroller and Auditor General of India. These appointments reflect the strategic vision and expertise of the individuals in guiding and overseeing the operations and growth of JFSL.

The new board of directors will play a crucial role in shaping the strategic direction of JFSL and driving its expansion in the financial services sector. With their diverse backgrounds and experience, the directors will contribute to developing and implementing innovative strategies, ensuring the success and competitiveness of JFSL in the market.

The demerger and appointment of directors mark significant milestones in the establishment of JFSL as an independent entity within the Reliance Industries group. By assembling a solid and knowledgeable board of directors, JFSL aims to leverage its expertise and industry insights to deliver value to its shareholders and provide comprehensive financial services to its customers.

Isha Mukesh Ambani, the elder daughter of Mukesh Ambani, has been appointed as a non-executive director of Reliance Strategic Investments Limited (RSIL). Alongside her, Anshuman Thakur, a Reliance executive, has also been appointed as a non-executive director. Their appointments reflect the commitment of Reliance Industries to bring in experienced and talented individuals to contribute to the growth and strategic direction of RSIL.

Rajiv Mehrishi, a former bureaucrat who served as home secretary and Comptroller and Auditor General (CAG), has been appointed as an independent director on RSIL for a term of five years. His extensive experience in the government sector and financial management will provide valuable insights and guidance to RSIL.

Sunil Mehta, the chief executive of the Indian Banks’ Association, and Bimal Manu Tanna, a chartered accountant who has worked with PwC, have also been appointed as independent directors. Their expertise in the banking and financial sectors will contribute to the overall governance and decision-making processes of RSIL.

These appointments reflect the focus on diversity and bringing in professionals from different backgrounds to strengthen the board of directors of RSIL. With their collective experience and expertise, the directors will play a crucial role in shaping the strategic direction and governance of the company.

The diverse composition of the board of directors, including non-executive directors and independent directors, ensures a well-rounded perspective and a balanced decision-making process. It signifies the commitment of RSIL to good corporate governance practices and strengthening its leadership team to drive the company’s success in the financial services sector. The appointment of directors to Reliance Strategic Investments Limited (RSIL) is subject to the approval of the members of RSIL and the Reserve Bank of India (RBI). The effectiveness of these appointments will be determined upon receiving approval from the RBI.

Hitesh Kumar Sethia has been appointed as the Managing Director and Chief Executive Officer of RSIL for a period of three years. Sethia brings with him extensive experience in the financial services sector, having worked across Europe, Asia (India & Greater China), and North America. He has spent a major part of his career at ICICI Bank, where he held leadership roles and gained expertise in various areas such as credit, retail banking, corporate banking, and transaction banking. The filing highlights his functional solid experience and understanding of technology applications in financial services.

The appointment of Hitesh Sethia as the CEO reflects RSIL’s focus on bringing in seasoned professionals with a deep understanding of the financial industry. With his diverse experience and leadership capabilities, Sethia is expected to drive the growth and strategic initiatives of RSIL in line with its vision and objectives.

It should be noted that the final confirmation of the appointments and the commencement of their roles is contingent upon the approval of the members of RSIL and the regulatory approval from the Reserve Bank of India. Hitesh Kumar Sethia brings a wealth of experience in various aspects of the financial services industry, including strategy formulation, market development, compliance, risk management, and team building.

He has worked across multiple countries and has been involved in setting up and scaling operations in different regions. Notably, he played a crucial role in establishing and expanding ICICI Bank’s operations in Canada and Germany, and he has held senior positions and country head positions in the UK and Hong Kong. In his previous role at ICICI Bank, he was the Head of Transaction Banking, based in Mumbai.

The decision by Reliance to separate its financial services unit from its core business reflects a strategic move to create distinct entities and potentially attract strategic partners or joint venture opportunities. By keeping financial services as a separate arm, Reliance aims to facilitate arm’s length transactions and provide a focused platform for potential partners interested specifically in the financial services segment. This approach aligns with the successful model that Reliance implemented with Reliance Jio and its tower infrastructure investment trust (InvIT).

The separation of the financial services unit underscores Reliance’s commitment to maximizing the potential and value of its different business segments. It allows for specialized management and strategic focus, ensuring that the financial services arm can operate independently and pursue growth opportunities in a dynamic and competitive market.