Shares of Jio Financial Services (JFSL), the financial arm of Reliance Industries, tumbled 3% in early trade today, January 20, reaching ₹271 as the company failed to impress Dalal Street with its December quarter results, which were released on Friday post-market hours.
For the quarter ended December 2024 (Q3FY25), the company reported a marginal rise of 0.3% in net profit to ₹295 crore, compared to ₹294.8 crore in the corresponding period last year.
The company, which operates in investing and financing, insurance broking, payment banking, payment aggregator/payment gateway services, and asset management, saw its revenues rise to ₹449 crore from ₹414 crore in the third quarter of the previous fiscal year.
Total expenses also increased year-on-year (YoY) to ₹131 crore, compared to ₹99 crore in the same quarter a year ago.
JFSL reported an increase in its assets under management (AUM), which rose to ₹4,199 crore, compared to ₹1,206 crore in the preceding September quarter of FY25. The company’s digital footprint grew in the December quarter, with an average of 7.4 million monthly active users (MAUs) across all its digital platforms, as per the company's earnings filing.
The company also stated that it had secured a marketing tie-up with the MyJio app to boost customer acquisition in the near term. Additionally, Jio Payments Services Ltd. (JPSL) received an online payment aggregator license.
Meanwhile, Jio Financial and BlackRock have agreed to form a joint venture (JV) to enter the asset management industry and have filed for final approval. In mid-October, the joint venture company applied to the Securities and Exchange Board of India (SEBI) to start a mutual fund (MF) business.
This venture aims to operate in wealth management activities, beginning with the establishment of a wealth management company and later expanding to a brokerage firm in India.
India's wealth management and broking sector is experiencing significant growth, driven by the rising number of demat accounts in recent years. Projections indicate promising prospects for the wealth management industry, with expectations of a significant increase in high-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs) in India.
The stock has been on a downward trend since May 2024, losing 27.5% to date and 31% from its April peak of ₹394.70 apiece. Jio Financial Services Limited, formerly known as Reliance Strategic Investments Limited and the demerged financial arm of Reliance Industries, entered the stock market on August 21, 2023.
The stock debuted with an initial listing price of ₹265 per share on the BSE and ₹262 per share on the NSE, slightly above its discovered price of ₹261.85 apiece. At current levels, it is trading near its listing price.
The company operates as a non-deposit-taking, non-banking financial company (NBFC), specialising in retail lending, merchant lending, payments bank operations, payment solutions, and insurance broking.
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