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Business News/ Markets / Stock Markets/  Jio Financial Services shares spike 5% after company announces JV with BlackRock
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Jio Financial Services shares spike 5% after company announces JV with BlackRock

Jio Financial Services surged 5% to ₹371.95 per share today after the company announced a joint venture with BlackRock for wealth management activities, including the establishment of a wealth management company and, subsequently, a brokerage firm in India.

Jio Financial Services operates as a non-deposit-taking, non-banking financial company, specialsing in retail lending, merchant lending, payments bank operations, payments solutions, and insurance broking. (REUTERS)Premium
Jio Financial Services operates as a non-deposit-taking, non-banking financial company, specialsing in retail lending, merchant lending, payments bank operations, payments solutions, and insurance broking. (REUTERS)

Jio Financial Services, the financial subsidiary of Reliance Industries, witnessed a significant surge of 5% during today's intraday session, reaching 371.95 per share. This increase follows the company's announcement, made through an exchange filing on Monday, regarding the signing of an agreement to establish a 50:50 joint venture with BlackRock. 

The venture aims to engage in wealth management activities, including the establishment of a wealth management company and, subsequently, a brokerage firm in India.

"This joint venture further strengthens the Company’s relationship with Blackrock, Inc., with whom the Company had announced a 50:50 joint venture on July 26, 2023, to transform India’s asset management industry through a digital-first offering and democratise access to investment solutions for investors in India," the company said in a regulatory filing. 

Also Read: Jio Financial Services: KR Choksey advises buying the stock, sees 24% upside – 3 key reasons behind the bullish stance

The company also informed investors that the launch of the wealth management and broking business is subject to regulatory and statutory approvals.

The broking and wealth management sector in India is experiencing significant growth, fueled by the surge in demat accounts in recent years. According to a Reuters report citing Jefferies, India's wealth managers oversee approximately $1–1.2 trillion in financial assets belonging to high net-worth individuals in the country.

Projections indicate promising prospects for the wealth management industry, with expectations of a substantial rise in high-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs) in India. Over the past five years, individuals with incomes surpassing Rs. 1 crore have seen a 15% increase, with forecasts suggesting their numbers will reach 3.40 lakhs in the next five years, contributing to the sector's expansion.

Also Read: Mukesh Ambani-led Reliance Industries to announce Q4 results on April 22

In July 2023, Jio Financial Services and BlackRock announced a 50:50 joint venture with a USD 150 million investment each to venture into the asset management sector in India. Jio Financial Services submitted its application to the Securities and Exchange Board of India (Sebi) on October 19. According to Sebi's status report as of December 31, 2023, the application is "under process."

An update on mutual fund approval status from the Sebi as of December 31, 2023, lists Jio Financial Services & BlackRock Financial Management among the applicants under consideration for a mutual fund licence, the report said.

Also Read: Reliance: 3 key reasons why Morgan Stanley is overweight on conglomerate

About Jio Financial Services

Jio Financial Services operates as a non-deposit-taking, non-banking financial company, specialising in retail lending, merchant lending, payments bank operations, payments solutions, and insurance broking.

The company strategically targets diverse customer segments, focusing on individuals and small businesses across urban, semi-urban, and rural areas of India. Its objective is to provide a comprehensive array of sustainable financial services.

Jio Financial Services manages its financial operations through subsidiary entities such as Jio Finance Limited (JFL), Jio Insurance Broking Limited (JIBL), and Jio Payment Solutions Limited (JPSL). Additionally, it operates a joint venture, Jio Payments Bank Limited (JPBL).

 

Disclaimer: We advise investors to check with certified experts before taking any investment decisions.

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Published: 16 Apr 2024, 10:11 AM IST
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