Shareholders and creditors to Mukesh Ambani-led Reliance Industries have cast almost 100% of their votes in favour of the company’s proposal to demerge its financial services business into Reliance Strategic Investments and rebranding it as Jio Financial Services, according to exchange notices filed by the firm.

Reliance Industries (RIL) had convened a meeting of secured and unsecured creditors and shareholders of both RIL and Reliance Strategic Investments (RSIL) on May 2 to seek their approvals for the demerger.

The RIL’s board had approved the demerger in November 2022.

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The RSIL is currently a non-deposit taking, systematically important non-banking finance company (NBFC) registered with the Reserve Bank of India (RBI). The move also comes at a time when the RIL withdrew its plans to merge a wholly-owned subsidiary Reliance New Energy (RNEL) with itself.

As per the contours of the deal, the RIL will issue one share of the demerged company with a value of Rs 10 each for every one share they hold in the company. The appointed date for the demerger is March 31, 2023. Upon the scheme becoming effective, the name of the demerged firm will be changed to Jio Financial Services (JFSL) and the new firm will be listed on the Indian bourses.

“The JFS will be a technology-led business, delivering financial products digitally by leveraging the nation-wide omni-channel presence of Reliance’s consumer businesses. JFS is uniquely positioned to capture multiple growth opportunities in financial services bringing millions of Indians into formal financial institutions,” Ambani had said while announcing the demerger in October last year.

Further, the JFSL has appointed banking sector veteran KV Kamath to be the non-executive chairman of the company, while McLaren Strategic Venture’s top executive Hitesh Sethi will be the new chief executive officer of the company.

As per brokerage house Jefferies, an aggressive push by the JFSL can impact existing players in consumer loans and payments space. The demerger and listing of the JFSL can take up to 6 months, Jefferies said, adding that build-up of franchise may be staggered as tech, analytics, recovery platforms may need to be built in-house.

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HDFC Securities Head of Retail Research Deepak Jasani said as Reliance Jio already holds licences for payment gateway and non-bank lending, it could initially focus on lending to retail segment and merchants. Later the JFSL could enter general insurance, mutual fund, stock broking and distribution of financial products. The 6.1% stake that the JFSL will have in Reliance industries and which may be monetised gradually, gives the entity a large capital base to enter lending business in a big way, Jasani said.

“Among NBFCs, Bajaj Finance and Poonawala Corp could get impacted by the entry of Jio, though it could take some time to replicate the competencies of these two. PayTM could also be impacted to an extent by Jio,” he said.