By Rama Venkat and Sethuraman N R

BENGALURU (Reuters) -Shares in India's Jio Financial Services (JFS), carved out of billionaire Mukesh Ambani's Reliance Industries, fell limit-down on Monday at its trading debut as investors waiting for more clarity about the scope of the business cashed out of the stock.

Ambani's Reliance had last month spun off JFS, with the stock price set at 261.85 rupees during a special discovery session, valuing JFS at around 1.7 trillion Indian rupees ($20.5 billion)

That price, however, was higher than the 160-190 rupees per share estimate by five analysts who spoke to Reuters before Reliance set the price. On Monday, JFS stocks fell 5% - the most it can fall in a session - shortly after it started trading, with over 73 million shares changing hands, reducing its valuation to 1.58 trillion rupees ($19 billion).

Shares of Reliance Industries were down 1.2%, while the broader Nifty 50 index was slightly up 0.5%, lifted by 2.5% gains in JFS' rival Bajaj Finance.

"What is the fair value of this company will only be clear after some time as earnings get reported and businesses get built out," said Arun Kejriwal, founder at Kejriwal Research & Investment Services.

Investors expect Ambani to give more details about JFS during the Reliance annual general meeting on Aug. 28.

Reliance Industries had approved the listing of 6.35 billion JFS shares, but it was not immediately clear how much of a stake this represented in the company.

As part of the de-merger, shareholders of Reliance Industries received one JFS share for every Reliance share.

Even with the lower valuation, JFS is the third-largest non-banking financial company (NBFC) in India, behind Bajaj Finance and Bajaj Finserv, which are valued at 4.15 trillion rupees and 2.32 trillion rupees respectively.

Non-Executive Chairman KV Kamath, a veteran banker and former chairman of ICICI Bank, said JFS intends to be a "full-service financial services player".

He declined to elaborate on the company's business plans or outlook, but JFS has already announced a joint venture with BlackRock Inc to launch asset management services in India, with an initial investment of $150 million each.

"JFS will differ from most other fintechs in having access to huge amounts of data gathered from a non-financial relationship," analysts at Macquarie Research said in a note earlier this year, referring to Reliance's retail and telecom units.

"It can process and analyse those in real time to offer financial services like Alibaba, Amazon, Apple, Facebook, Google etc," the research note added.

As part of the demerger, Reliance Industries folded into JFS the following units: Reliance Retail Finance, Reliance Payment Solutions Ltd, Jio Information Aggregator Services and Reliance Retail Insurance Broking. Jio Payments Bank will follow if the merger is approved by the central bank, the company said.

Reliance had named Hitesh Sethia as JFS' chief executive and Ambani's daughter Isha Ambani as a non-executive director on the company's board.

Narendra Solanki, head of fundamental research at Anand Rathi Shares and Stock Brokers attributed JFS's weak trading debut to the exit of index funds tracking Indian benchmark indices, which must sell their shares in JFS after its listing.

JFS is included in major global indices such as FTSE as well as India's blue-chip Nifty 50 index after its spin off because Reliance Industries is also part of these indices.

It is scheduled to be removed from some of India's indices at the end of its third day of listing, as per exchange rules.

($1 = 83.1020 Indian rupees)

(Reporting by Rama Venkat and NR Sethuraman in Bengaluru; additional reporting by Ira Dugal in Mumbai; Editing by Savio D'Souza and Miral Fahmy)