jio financial business plan

JioBusiness plans for your business needs

Jiobusiness plans as per your business needs, connect with us.

Jio Financial Services(JFS) Business Model

Jio Financial Services (JFS) is a financial services company that was demerged from Reliance Industries Limited (RIL) in 2022. JFS business model is providing a range of financial services to consumers and businesses in India.

JFS services

Lending service to consumers : Jio Financial Services offers loans to consumers to purchase consumer durable goods such as televisions, refrigerators, mobiles.

Lending service to merchants : Jio Financial Services also offers loans to retail merchants to finance their inventory and working capital required for daily needs.

Business loans to SMEs: Jio Financial Services offers loans to small businesses to finance their business expense and growth needs.

Upcoming finance sector : JFS is planning disrupt Mutual fund, Insurance and Lending as well same again like Telecommunication and OTT Services

These products and services allow consumers and businesses to make payments, transfer money, and access financial services digitally.

Jio Financial Services business uses of their own technology platform and partnerships to deliver financial services to customers in a more efficient way. These way JFS inhancing the digital financial experience.

Jio Financial Services is targeting a large number of audience and also growing market of India. The country’s financial services sector is expected to grow at CAGR of 12% over the next 5 years. Jio Financial Services is well-positioned to capitalise on this growth, given its strong parent company, its large customer base, and its focus on technology.

Jio Financial Services is very scalable business and can expand its reach by partnering with own exiting business like reliance retail and online jio customer.

Jio Financial Services is new company, but it has the potential to be a major player in the Indian financial services sector. The company has three big factor Affordability Digital solution and it’s technology will be able to capture the market and succeed.

New sector of jio financial Slservices

Reliance industry is once again on the brink of transformation from revolutionizing same before in telecom industry with Jio, to reshaping the entertainment landscape with Jio Cinema. Now set it’s own height on the financial and mutual fund sector.

Jio Financial Services and how it’s poised to redefine the future of the mutual fund industry. Prepare to witness a potential game-changer that could send shockwaves to companies like Bajaj Finserv Ltd and Bajaj Finance Ltd.

It’s the strategic move by Jio Financial Services and how BlackRock, one of the world’s largest asset management companies, is collaborating with Jio Financial Services to bring affordable and innovative investment solutions to millions of Indian investors.

Mukesh Ambani is keeping his plans under wraps, leaving us guessing about the exact nature of Jio Financial Services offerings. Will it venture into mutual funds, insurance, lending or something entirely unexpected?

People think that reliance demerge telecommunication sector but now take big decision on financial sector. When reliance separate entity jio Financial Services itself valued 1.66 lakh crore.

Company one by one separate entity and make it big. With this decision jio Financial Services came under top 50 company list. It became 8th largest Company in finance sector and 3rd largest in non banking finance sector.

Key companies under Jio Financial Services

Which sector will target jio finance services.

According to sources Reliance try to disrupt the Mutual fund sector, insurance sector and lending sector also.We knew that how jio is capturing online customer and reliance retail capturing offline customer and this is pre-planned strategy helps further in financial sector.

Jio finance services partnered with BlackRock company each Company investef 150 million dollar to expand in asset management business. We all know that BlackRock is biggest asset management company in the world and reliance want to capture available this big opportunity in India.

Why entering in mutual fund sector?Now mutual fund industry manage around 44 lakh crore. More important thing that it is grow CAGR with more than 20%.in 2013 it manage 8 lakh crore only.

According to the report of Edelweiss in 2022, only 9.7 % people invest in mutual fund. Invest in the aspect like real estate, lending, insurance etc.

Today 6.65 cr people invest in SIP it’s average value around 1100 cr means monthly average investment ia 2200 rupee.

Today more than 44 company registered in financial sector like PSU, Private bank, NBFC, Digital platform like Paytm, Zerodha etc. Out of 44, top 10 company manage 80% of wealth.

Leave a Comment Cancel reply

Save my name, email, and website in this browser for the next time I comment.

Hey, I am Nehal patel an engineer by profession and intrepreneur by passion, and founder of BusinessBlast. BusinessBlast is works on business ideas, marketing techniques, product development and much more.

We have updated our terms and conditions and privacy policy Click "Continue" to accept and continue with ET BFSI

We use cookies to ensure best experience for you

We use cookies and other tracking technologies to improve your browsing experience on our site, show personalize content and targeted ads, analyze site traffic, and understand where our audience is coming from. You can also read our privacy policy , We use cookies to ensure the best experience for you on our website.

By choosing I accept, or by continuing being on the website, you consent to our use of Cookies and Terms & Conditions .

• Leaders Speak
• Brand Solutions
• Financial Services
• Outlook 2024: How will Jio Financial Services fare this year?

JFS is among the world's highest-capitalised financial services platforms, which provides financial support for a competitive edge in a fintech market where startups often face funding challenges.

• ETBFSI Research ,
• Updated On Jan 4, 2024 at 12:01 PM IST

• By ETBFSI Research ,
• Published On Jan 3, 2024 at 08:00 AM IST

All Comments

By commenting, you agree to the Prohibited Content Policy

Find this Comment Offensive?

• Foul Language
• Inciting hatred against a certain community
• Out of Context / Spam

Join the community of 2M+ industry professionals

Subscribe to our newsletter to get latest insights & analysis., download etbfsi app.

• Get Realtime updates
• Save your favourite articles

• jio financial services
• reliance industries
• jio payments bank

• StockEdge Premium
• StockEdge Pro
• StockEdge Club

• Trending Stocks
• Technical Analysis
• Fundamental Analysis
• StockEdge Tutorials
• Mutual Fund

How Jio Financial Plans to Disrupt India’s Financial Service Sector?

Table of Contents

“ Jio ” is a famous household name in India. You might remember how India’s largest conglomerate, Reliance Industries, penetrated the telecom space back in 2015. “Free Internet” that’s how they have entered the highly competitive telecom market. They completely changed the industry dynamics by eliminating small players to become the market leader in a span of just 8 years.  

Reliance Industries is now on its next big mission to disrupt the financial services sector with its recent listing of Jio Financial Services after demerging from Reliance Industries on July 20, 2023. 

But, yes, after getting listed on the stock exchanges almost a month later on August 21 at Rs. 262 per share, the stock was continuously hitting lower circuit breakers and made a low Rs. 202 per share just before Motilal Oswal Mutual Fund  came as a saviour. They made an NSE bulk deal, buying almost 3.72 crores of shares of Jio Financial Services at an average price of Rs. 202.80 per share. 

You can easily track bulk deals or block deals for any stock using StockEdge. 

To know the difference between the two, we have explained in the blog which you may read for your reference: Difference between Bulk Deals and Block Deals  Coming back to Mr. Mukesh Ambani’s vision for Jio Financial Services in the financial sector of India.

Vision of Jio Financial Services

Mukesh Ambani was eyeing to enter the financial service sector long back as it applied for the payments bank license in 2015, which was acquired just a year before it launched its Jio telecom services.

Now, with the demerger of Jio Financial Services, the company is expected to unlock values for its investors as it wishes to enter different avenues of financial services such as loans, asset management, insurance and others. 

It has already declared its intent to enter asset management with Blackrock, with each partner investing $150 billion.

Also, in the 46th Annual General Meeting (AGM) of Reliance Industries Ltd, the company announced that Jio Financial Services Ltd will also enter the insurance industry by partnering with potential global players.  

It further ensures ubiquitous offerings for both consumers and merchants driving digital adaptation, such as blockchain-based platforms and RBI’s Central Bank Digital Currency (CBDC). 

But why is Reliance aiming to tap into the financial services sector? Let’s 1st understand the landscape of India’s financial services sector. 

Financial Services: Industry Outlook

The outlook for India’s financial services sector appears promising and dynamic, reflecting a robust growth trajectory over the years. With a commendable Compound Annual Growth Rate (CAGR) of 14%, the market capitalization of shares on the (NSE) National Stock Exchange and the Bombay Stock Exchanges (BSE) has experienced substantial expansion from March 2017 to March 2023. The concurrent increase in the number of companies traded on both exchanges has increased from 4,613 to 6,466 listed shares. 

Furthermore, the increase in demat accounts has been remarkable, surging from 27.85 million to 114.50 million between March 2017 and March 2023, at a robust CAGR of 26.57%. This escalating trend signifies retail investors’ growing interest and participation in the stock market.

The mutual fund landscape also displays notable growth, with Assets Under Management (AUM) of mutual funds soaring from ₹17,456 billion in March 2017 to ₹39,420 billion in March 2023, reflecting a significant 14% CAGR. This expansion highlights the increasing preference for mutual funds as an investment avenue and underscores the trust investors place in the financial markets. 

Another pivotal indicator, which is the Systematic Investment Plan (SIP) contribution in mutual funds, showcases a commendable surge at a 24% CAGR from March 2017 to March 2023, ascending from ₹439 billion to ₹1,560 billion. This upward trajectory in SIP contributions signifies a robust culture of regular and disciplined investment, further strengthening the sector’s stability.

Overall, the financial services sector in India appears poised for continued growth and innovation. The substantial rise in market capitalization and an increasing number of traded companies highlight the sector’s expanding opportunities and offerings. The surge in demat accounts and mutual fund AUM demonstrates the rising investor confidence and participation underpinned by robust regulatory measures and technological advancements. The consistent growth in SIP contributions signifies a more informed and engaged investor base, solidifying the foundation for India’s resilient and thriving financial services landscape.

All these factors can create tailwinds for Jio Financial in the upcoming years.  

Now you know why the company’s current focus is on the asset management business as it entered into a Joint Venture (JV) with American multinational investment company Blackrock, Inc., which is the largest Asset Management Company in the World with an AUM size of US$8.59 trillion as of December 31, 2022. 

To give you an idea, how big is BlackRock, Inc.? India is a $ 3.75 USD trillion dollar economy, and Blackrock’s AUM size is almost double that at US$8.59 trillion.  

So, you see, Jio Financial Services is well-positioned after it partnered with the World’s largest asset management company, Blackrock Inc., to capture the untapped market of India’s financial services industry that has endless opportunities. Now, let’s discuss a few strategic growing opportunities for Jio Financial Services Ltd.  

Strategic Opportunities for Jio Financial Services Ltd.

Although India is the 5th largest economy in the world with a GDP of $3.75USD trillion, the country’s AuM to GDP is significantly lower than the world average of 63% and also lower than many developed economies like the US (140%), Canada (100%), France (99%), UK (79%), Germany (76%), Japan (49%) and China (21%).

Hence, a relatively low penetration may provide enormous growth opportunities for Jio Financial Services  Ltd. (JFSL) 

So, how can Jio sell its financial products? Is there any edge? Let’s find out! 

Jio’s Edge in Financial Services

Since the launch of Jio’s telecom business in 2015, the company has rapidly gained customers. In the below image, you can see the total number of subscribers of Reliance Jio in 2017 was 108 million, which increased to 439 million by 2023 in a span of just 6 years. 

Hence, the company has access to almost 439 million customers to sell its financial products. That’s definitely an edge for the company. 

Infact, Jio’s B2B business, conducted through Jio Mart and recently acquired MetroB2B, ensures that Reliance has access to the buying patterns of tens of millions of small and medium business owners. Also, Reliance is one of the largest conglomerates in India, and collaborations with Blackrock Inc. (the largest AMC in the world) indicate deep pockets, which will allow them to scale up much faster than other companies.

In addition to that, the company’s sizable Retail store networks across India, which make up almost 3% of India’s retail business, are available for the company to grow its retail financing business as well. 

Also, the “ My Jio ” app presence across its telecom network base offers easy access to consumers that will help Jio Financial to cross-sell its products with ease. 

No doubt, Jio Financials may capitalize on the growing financial services industry of India. But there are a few more players that could be major beneficiaries, let’s find out!

Best Stocks: Proxy Play the financialization trend 

• Computer Age Management Services (CAMS) Ltd.

CAMS is the best proxy for India’s mutual fund landscape due to its direct connection with industry AUM growth. Operating as a transfer agency, it provides technology-based financial services to mutual funds and financial institutions. The company has ~69% market share, and they are one of the leading RTA for mutual funds, consistently maintaining robust 30% margins and returns. Investing in CAMS offers exposure to the thriving AMC sector within India’s mutual fund arena.

•   Kfin Technologies Ltd

Kfin Technologies Ltd is a tech-based financial platform offering comprehensive services to India’s capital markets, serving asset managers and corporate issuers across various asset classes. The company operates in three sectors: investor solutions, issuer solutions, and global business services. It’s the largest provider of investor solutions to Indian mutual funds, boasting a ~59% market share. Kfin has a track record of consistently acquiring new clients in all segments.

• Angel One Ltd

Angel One stands out as a strong contender in retail broking, excelling in various aspects. It surpasses the industry in client acquisition (19% share in new clients), experiencing a significant increase in average daily turnover market share (4 times since FY20) and NSE active clients (becoming the third largest with around 13% share). This growth is attributed to a rise in direct client acquisition.

• BSE Ltd. 

BSE also benefits from this proxy approach due to its status as one of the world’s oldest and largest stock exchanges in terms of  listed companies. It has evolved into a valuable entity within India’s duopoly equity exchange market. Given the limited investment in financial assets, particularly in Indian equity markets across different demographics, BSE holds a substantial long-term potential.

• CDSL Ltd. 

CDSL, backed by BSE Ltd., is among the two exclusive depositories providing dematerialization for a diverse array of securities, enabling electronic holding and transactions of securities. CDSL also extends KYC services for investors in India’s capital markets to different financial intermediaries. Additionally, it offers online services like e-voting, e-Locker, Registrar & Transfer Agent, and National Academy Depository. Holding a 70% demat account market share, CDSL boasts the highest count of registered Depository Participants (DPs) in this sector. 

You can also watch Mr. Vivek Bajaj’s video where he has explained Investment Themes around Jio Financial and how investors can Proxy play the financialization trend in India. 

The Bottom Line

Jio Financial could disrupt the financial services industry as Reliance (RIL) did for the telecom industry with the launch of Jio. Also, the collaborations between Jio Financial Services and BlackRock mark a significant stride towards reshaping India’s financial landscape. With a powerhouse like BlackRock’s expertise and Jio’s extensive reach, the stage is set for an innovative disruption in the financial sector. As they leverage technology and strategic collaboration, we can anticipate a future where financial services become more accessible, efficient, and tailored to the needs of the Indian population.

This collaboration promises growth for both entities and has the possibility to impact millions of Indians positively by ushering in a new era of financial inclusivity and convenience. The journey ahead is one to watch as Jio Financial Services embarks on its mission to redefine the financial services sector in India.

Happy Investing! 

VPRP IPO: Is Vishnu Prakash R Punglia Ltd a Worthy Investment?

Jupiter life line hospitals ipo: all you need to know.

StockEdge is a self-help Equity and Mutual Fund research tool. It empowers retail investors to identify investment opportunity with all the necessary data and analytics.

Evaluating the EMS IPO: Is it Right for You?

OptionsEdge: 7-hours Exclusive Session on Option Trading

• Timing (Mon-Sat): 10 am to 7 pm
• Sales: +919830994463
• Support: +919830994402
• Club Support: +916289906895
• Affiliate: +917003567131

• StockEdge.com
• Compare Plans

Get StockEdge App

• Market Themes
• StockEdge Version Updates
• Visit StockEdge.com

© 2024 Kredent InfoEdge Pvt Ltd.

BlackRock Doubles Down on India Bet, Signs New JV With Ambani's Jio Financial

BlackRock Doubles Down on India Bet, Signs New JV With Ambani's Jio Financial

FILE PHOTO: People stand next to a logo of Jio Financial Services ahead of its listing ceremony at the Bombay Stock Exchange in Mumbai, India, August 21, 2023. REUTERS/Francis Mascarenhas/File Photo

MUMBAI (Reuters) - Jio Financial Services said on Monday that it had entered into a new joint venture (JV) with U.S.-based BlackRock Inc to set up a wealth management and broking business in India less than a year after launching an asset management venture.

Jio Financial Service, part of billionaire Mukesh Ambani-led Reliance Group, said the JV aims to tap into India's increasingly lucrative wealth business and will include the incorporation of a wealth management firm and, subsequently, a brokerage company.

India's wealth managers look after $1-1.2 trillion of financial assets owned by high net-worth individuals of the South Asian country, as per a recent Jefferies report.

By setting up the brokerage firm, Jio Financial and BlackRock also hope to cash in on the growing tribe of retail investors in India who have been betting on the country's benchmark stock indices, which are hovering at record-high levels.

Data from the country's market regulator, the Securities and Exchange Board of India (SEBI), says trading accounts in India have risen by over 30% to roughly 148 million as of February from the same time last year.

Last June, the two companies had formed a 50:50 joint venture to launch asset management services in India and had pledged an initial investment of $150 million each, with hopes to democratise access to investment solutions for investors in the country.

The firms had applied for an in-principle approval to set up the asset management business with SEBI in Oct, but are still awaiting approval.

BlackRock shares rose 1.7% in early trade on the New York Stock Exchange after Monday's announcement.

Last year, Jio Financial Services was demerged from Reliance Industries, with the markets ascribing a valuation of nearly $20 billion to the venture, which is still building out its business.

(Reporting by Indranil Sarkar and Jayshree P Upadhyay; Additional reporting by Sethuraman NR ; Editing by Tasim Zahid)

Copyright 2024 Thomson Reuters .

Tags: United States , India

The Best Financial Tools for You

Credit Cards

Personal Loans

Comparative assessments and other editorial opinions are those of U.S. News and have not been previously reviewed, approved or endorsed by any other entities, such as banks, credit card issuers or travel companies. The content on this page is accurate as of the posting date; however, some of our partner offers may have expired.

Subscribe to our daily newsletter to get investing advice, rankings and stock market news.

See a newsletter example .

You May Also Like

7 best manufacturing stocks to buy now.

Jeff Reeves April 17, 2024

What's a Self-Directed IRA?

Kate Stalter April 17, 2024

5 Cloud ETFs to Buy Now

Coryanne Hicks April 17, 2024

8 Best Stocks to Buy Now With $1,000

Wayne Duggan April 16, 2024

Mutual Funds vs. Stocks

Marc Guberti April 16, 2024

7 Best Semiconductor ETFs to Buy in 2024

Tony Dong April 16, 2024

7 Best Funds to Hold in a Roth IRA

Money Market Funds to Buy for Safety

Tony Dong April 15, 2024

Smart Tax Strategies

Kate Stalter April 15, 2024

Best Long-Term Stocks to Buy and Hold

Glenn Fydenkevez April 15, 2024

6 Best Nasdaq 100 ETFs

Wayne Duggan April 15, 2024

10 Best Value Stocks to Buy Now

Ian Bezek April 12, 2024

Water Stocks and ETFs

Matt Whittaker April 12, 2024

7 Stocks Jeff Bezos Is Buying

Jeff Reeves April 12, 2024

Is It Time to Invest Internationally?

Kate Stalter April 11, 2024

Cheap Dividend Stocks to Buy Under $10

Wayne Duggan April 11, 2024

5 Best Large-Cap Growth Stocks

Glenn Fydenkevez April 11, 2024

7 Dividend Kings to Buy and Hold Forever

Tony Dong April 11, 2024

5 Socially Responsible Investing Apps

Coryanne Hicks April 10, 2024

7 Diabetes and Weight Loss Drug Stocks

Brian O'Connell April 10, 2024

Jio Financial, BlackRock to tap India’s wealth management market

Jio Financial Services, part of the Indian conglomerate Reliance, is forming a joint venture with U.S. asset manager BlackRock to set up a wealth management and broking business in India, the two firms said Monday.

The announcement follows BlackRock and Jio Financial launching a joint venture last year to offer asset management services in India. The two companies plan to invest $150 million each in the joint venture, they said last year. That joint venture is awaiting the Indian market regulator’s approval.

The expansion of BlackRock and Jio Financial’s partnership underscores Reliance’s growing ambitions in the financial services sector. The $237 billion Indian firm already leads the nation’s refinery, retail and telecom sectors. (India’s central bank doesn’t permit tycoons to receive the banking license.)

Jio Financial Services said in a report last year that it was taking a direct-to-customer approach, using alternate data models for personalized offerings and a unified app for diverse customer financial needs, to cut costs and tailor interactions.

Since its public debut in August , Jio Financial Services has already expanded to insurance and lending businesses .

• TN Navbharat
• Times Drive
• ET Now Swadesh

business economy

Jio Financial Services Listing Date, Plans: BIG MESSAGE from Reliance Industries Billionaire Chairman Mukesh Ambani

Updated Aug 7, 2023, 13:43 IST

Mukesh Ambani (Image Source: Reliance Industries, TN Digital)

Who Is Karl-Erivan Haub? American-German Billionaire Went Missing In Switzerland In 2018 Traced To Russia

Hawaii AG Unveils Report On Destructive Maui Wildfire That Killed 101

Ryanair's Met Gala Twist Goes Viral, 'Chef Admin Never Misses His Recipe,' Says Netizens

Delhi HC Overturns Conviction in Child Abuse Case, Says False Accusations 'More Painful Than Jail'

2 Indo-Canadian Men Arrested In Toronto For Country's Largest Gold Heist

See Smoke In Orlando? Don't Worry, There's No Fire Around

What Happened To Ian Charles? YouTuber James Charles' Brother Is 'Not Dead'

Man City vs Real Madrid: With No Away Goal Rule In Champions League, What Happens After A Draw

Big News For Paytm UPI Users! Company Starts Transferring '@paytm' Handles To Other Banks

Adani Family Injects Rs 8,339 Crore into Ambuja Cements, Raising Stake to 70.3 pc

7 Automobile Stocks Poised To Thrive Based On BJP's 2024 Lok Sabha Election Manifesto

Rs 60 Lakh Gold, Computer Worth Rs 1.25 Lakh and Much More: Dimple Yadav Self-Declares Assets of Over Rs 15.5 Crore

RBI Issues Draft Guidelines On Payment Aggregators- Check Details

Jio Financial Services can be a real threat to fintech business models & NBFCs, says Macquarie

Reliance industries will transfer 6.1 percent of the company's shares held by a wholly owned subsidiary to jio financial services, which signals a grand ambition with respect to financial services..

• India Today
• Business Today
• Reader’s Digest
• Harper's Bazaar
• Brides Today
• Cosmopolitan
• Aaj Tak Campus
• India Today Hindi

JioFiber Business Plan: What is it, how much you pay, what are benefits and other key details

Reliance jio on tuesday announced integrated jiofiber business plans for micro, small and medium businesses in india. these plans start from rs 501 and go up to rs 10,001 and offer various tools to help micro, small and medium businesses in india..

Listen to Story

The Economic Times daily newspaper is available online now.

All eyes on jio financial services in the upcoming reliance industries limited agm.

Reliance Industries Limited will hold its annual general meeting (AGM) on August 28, where Chairman Mukesh Ambani is expected to make key announcements regarding the company's growth and expansion plans. The focus will be on Jio Financial Services (JFS), which recently listed on the stock exchanges. Ambani is likely to share growth plans for JFS, including its entry into the B2B credit business and expansion into insurance, payments, digital broking, and asset management.

Read More News on

Download The Economic Times News App to get Daily Market Updates & Live Business News.

Murugappa Group and the Tatas could make iPhone camera modules in India. Here’s why it is a big deal.

The surge in Indian pharma exports to the US has three simple explanations

Answered: Four critical questions on the proposed changes in PF wage ceiling

Why Bitcoin won’t be the same three days from now

Ather is riding on these five factors to break TVS, Ola’s e-scooter dominance

Jittery equities: Five things that can spook bulls and how you can navigate them.

Find this comment offensive?

Choose your reason below and click on the Report button. This will alert our moderators to take action

Reason for reporting:

Your Reason has been Reported to the admin.

To post this comment you must

Log In/Connect with:

Fill in your details:

Will be displayed

Will not be displayed

Share this Comment:

Uh-oh this is an exclusive story available for selected readers only..

Worry not. You’re just a step away.

Prime Account Detected!

It seems like you're already an ETPrime member with

Login using your ET Prime credentials to enjoy all member benefits

Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.

To read full story, subscribe to ET Prime

₹34 per week

Billed annually at ₹2499 ₹1749

Super Saver Sale - Flat 30% Off

On ET Prime Membership

Unlock this story and enjoy all members-only benefits.

Offer Exclusively For You

Save up to Rs. 700/-

ON ET PRIME MEMBERSHIP

Get 1 Year Free

With 1 and 2-Year ET prime membership

Get Flat 40% Off

Then ₹ 1749 for 1 year

ET Prime at ₹ 49 for 1 month

Stay Ahead in the New Financial Year

Get flat 20% off on ETPrime

90 Days Prime access worth Rs999 unlocked for you

Exclusive Economic Times Stories, Editorials & Expert opinion across 20+ sectors

Stock analysis. Market Research. Industry Trends on 4000+ Stocks

​Get 1 Year Complimentary Subscription of TOI+ worth Rs.799/-​

Stories you might be interested in

India's Jio Financial Services rises 5% after BlackRock wealth management JV

• Medium Text

Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here.

Reporting by Nandan Mandayam in Bengaluru; Editing by Varun H K

Our Standards: The Thomson Reuters Trust Principles. New Tab , opens new tab

Business Chevron

Fed to cut US rates 'at some point, but no hurry, Mester says

Cleveland Federal Reserve Bank President Loretta Mester said on Wednesday she expects price pressures to ease further this year, allowing the Fed to reduce borrowing costs, but only when it is "pretty confident" inflation is heading sustainably to its 2% goal.

• Tata Steel share price
• 160.05 -0.53%
• Infosys share price
• 1,414.75 -3.65%
• NTPC share price
• 359.40 -0.54%
• State Bank Of India share price
• 751.90 -0.65%
• HDFC Bank share price
• 1,509.40 0.97%

Jio Financial to enter insurance, plans global tie-ups

Jio financial will enter the insurance segment to offer simple, yet smart, life-, general- and health-insurance products, potentially partnering with global players, said mukesh ambani.

MUMBAI : Jio Financial Services Ltd (JFSL) is set to launch a slew of insurance products, possibly in partnership with global companies, Reliance Industries Ltd (RIL) chairman and managing director Mukesh Ambani said on Monday.

“JFSL will enter the insurance segment to offer simple, yet smart, life-, general- and health-insurance products through a seamless digital interface, potentially partnering with global players," Ambani said at RIL’s virtual annual general meeting.

Although Jio Financial has been seen as a disruptor in the financial-services space given Reliance Jio Infocomm Ltd’s runaway success in telecom, many believe it wouldn’t be easy to replicate that success in insurance and other financial-sector products. That is because the financial-services space is more tightly regulated and established entities such as banks, non-banks and insurance firms have built their businesses over years.

Still, Jio’s entry could lead to greater penetration of insurance in India. Insurance penetration, or the ratio of total insurance premiums to gross domestic product (GDP), in the country rose from 2.7% around the turn of the millennium to 4.2% in 2020, and remained the same in 2021, according to the Economic Survey 2022-23.

The company, Ambani said, will use predictive data analytics to co-create contextual products with partners. Last October, RIL announced the demerger of its financial-services business. As part of the demerger, each RIL shareholder received shares in Jio Financial on a 1:1 basis in July.

So far, Jio has tied up with BlackRock, the US manager of $11 trillion in assets for an asset management venture in India.

“JFSL has been conceptualized to fill a critical gap in the financial-services needs of a large section of the Indian economy, mainly in the informal and underserved sectors in rural, semi-urban, and urban areas," said Ambani.

He said for tens of thousands of small businesses, merchants, and self-employed entrepreneurs, the ease of doing business must mean ease in borrowing, investments, and payment solutions. Jio Financial, he said, plans to democratize financial services for 1.42 billion Indians, giving them access to simple, affordable, innovative, and intuitive products and services. “In payments, JFSL will consolidate its payments infrastructure with a ubiquitous offering for both consumers and merchants, further driving digital payment adoption for India," he said.

Ambani said Jio Financial products will not just compete with current industry benchmarks but also explore features such as blockchain-based platforms and central bank digital currency (CBDC).

“They will adhere to the highest standards of security, regulatory norms, and ensure protection of customer transaction data at all times," he said.

RIL has capitalized Jio Financial with a net worth of ₹ 1.2 trillion to create one of the world’s highest capitalized financial-service platforms at inception, he said, adding that it has a strong board, led by veteran banker K.V. Kamath.

“A highly motivated leadership team is being built with a combination of financial industry experts and young leaders who are eager to take on big challenges," Ambani said.

Milestone Alert! Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Wait for it…

Log in to our website to save your bookmarks. It'll just take a moment.

You are just one step away from creating your watchlist!

Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.

Your session has expired, please login again.

Congratulations!

You are now subscribed to our newsletters. In case you can’t find any email from our side, please check the spam folder.

Subscribe to continue

This is a subscriber only feature Subscribe Now to get daily updates on WhatsApp

• Business News
• India Business News

Jio Financial Services listing: All you need to know

Visual Stories

PPF Calculator

This financial tool allows one to resolve their queries related to Public Provident Fund account.

FD Calculator

When investing in a fixed deposit, the amount you deposit earns interest as per the prevailing...

NPS Calculator

The National Pension System or NPS is a measure to introduce a degree of financial stability...

Mutual Fund Calculator

Mutual Funds are one of the most incredible investment strategies that offer better returns...

Other Times Group News Sites

Popular categories, hot on the web, trending topics, living and entertainment, latest news.

• Investor Relations
• Corporate sustainability
• About BlackRock
• Global Impact
• Contacts and Locations
• Doing Business with BlackRock
• Diversity, Equity and Inclusion
• Media Contacts

PRESS RELEASE

Q1 2024 earnings

Access BlackRock's Q1 2024 earnings

• BlackRock Investment Institute
• Investment Stewardship
• Our approach to sustainability
• Public Policy
• Long-term capitalism
• Investor Perspectives

BLACKROCK INVESTMENT INSTITUTE

Mega forces: An investment opportunity

Mega forces are big, structural changes that affect investing now - and far in the future. This creates major opportunities - and risks - for investors.

• Annual Reports & Proxy Information
• SEC Filings
• Stock Information
• Dividend History
• Events & Presentations
• Corporate Governance
• 2022 Annual report
• Corporate Sustainability
• Human capital
• Environmental Sustainability
• Ethics & Integrity
• Health & Safety
• Social Impact

We’ve announced a $50 million commitment to help millions of people living on low-to moderate incomes build emergency savings.

• Search Jobs
• Life at BlackRock
• Rewards & Benefits
• Inclusion & Diversity
• Learning & Development
• Supporting Veterans
• BlackRock Alumni Network

BlackRock and Jio Financial Services Agree to Form Joint Venture to Enter India’s Asset Management Industry

• Jio BlackRock combines BlackRock’s scale and investment expertise with Jio Financial Services’ knowledge and resources to deliver affordable, innovative investment solutions to millions of investors in India.
• Partnership aims to transform India’s asset management industry through a digital-first offering and democratise access to investment solutions for investors in India.

Global/APAC/Mumbai, July 26, 2023 – BlackRock [NYSE: BLK] and Jio Financial Services Limited (JFS) today announced an agreement to form Jio BlackRock, a 50:50 joint venture that combines the respective strengths and trusted brands of BlackRock and JFS to deliver tech-enabled access to affordable, innovative investment solutions for millions of investors in India.

Jio BlackRock brings BlackRock’s deep expertise and talent in investment management, risk management, product excellence, access to technology, operations, scale, and intellectual capital around markets, while JFS contributes local market knowledge, digital infrastructure capabilities and robust execution capabilities. Together, the partnership will introduce a new player to the India market with a unique combination of scope, scale, and resources. JFS and BlackRock are targeting initial investment of US$150 million each in the joint venture.

Rachel Lord, Chair & Head of APAC, BlackRock , said:  “ India represents an enormously important opportunity. The convergence of rising affluence, favourable demographics, and digital transformation across industries is reshaping the market in incredible ways.

We are very excited to be partnering with JFS to revolutionise India’s asset management industry and transform financial futures. Jio BlackRock will place the combined strength and scale of both of our companies in the hands of millions of investors in India.”

Speaking on this transaction, Mr. Hitesh Sethia, President and CEO, JFS , said: “This is an exciting partnership between JFS and BlackRock, one of the largest and most respected asset management companies globally. The partnership will leverage BlackRock’s deep expertise in investment and risk management along with the technology capability and deep market expertise of JFS to drive digital delivery of products.

Jio BlackRock will be a truly transformational, customer centric and digital-first enterprise with the vision to democratise access to financial investment solutions and deliver financial well-being to the doorstep of every Indian.”

The joint venture will launch operations post receipt of regulatory and statutory approvals. The company will have its own management team.

About BlackRock India

BlackRock India is at the very heart of our global operating platform, enabling us to innovate our business to benefit clients. Over the past 17 years, our India platform has grown to over 2,400 employees across offices in Mumbai, Gurgaon, and Bangalore powering our global network by employing talents across investments, alternatives, operations, analytics and modelling, and corporate functions. 

About Jio Financial Services Limited

Jio Financial Services Limited (JFS) through its operating subsidiaries and joint ventures will offer broad range of financial services solutions addressing the needs of both consumers and merchants. JFS will use technology as a key enabler to reach customers directly.

Media Contacts:

BlackRock Rowena Kwok Head of Corporate Communications for APAC [email protected]

Charles Donohoe Director, Corporate Communications [email protected]

Jio Financial Services Limited ( JFS ) Saurabh Rajderkar [email protected]

BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit  www.blackrock.com/corporate

As a global investment manager and fiduciary to our clients, our purpose at BlackRock is to help everyone experience financial well-being. Since 1999, we've been a leading provider of financial technology, and our clients turn to us for the solutions they need when planning for their most important goals.

You are using an outdated browser. Please upgrade your browser to improve your experience and security.

• Moneycontrol Trending Stock
• Infosys  INE009A01021, INFY, 500209
• State Bank of India  INE062A01020, SBIN, 500112
• Yes Bank  INE528G01027, YESBANK, 532648
• Bank Nifty 
• Nifty 500  
• Mutual Funds
• Commodities
• Futures & Options
• Cryptocurrency
• My Portfolio
• My Watchlist
• FREE Credit Score ₹100 Cash Reward
• My Messages
• Price Alerts
• Chat with Us
• Download App

Follow us on:

Countdown to Lok Sabha Elections 2024

Jio Financial, Blackrock ink pact for wealth management and broking business

The entities had announced an agreement in july 2023 to form a 50:50 joint venture with a $150-million investment each to enter the asset management business in india..

Representative image

Jio Financial Services announced on April 15 that it has entered into a joint venture with US-based BlackRock for wealth management and broking business in India.

In an exchange filing, the Reliance Group-backed financial entity said it has signed a 50:50 joint venture for the purpose of undertaking wealth business including incorporation of a wealth management company and subsequent incorporation of a brokerage company in India.

Jio Financial Services Ltd , the demerged financial services arm of Mukesh Ambani's Reliance, and BlackRock had announced an agreement in July 2023 to form a 50:50 joint venture with a $150 million investment each to enter the asset management business 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," it said.

The launch is subject to regulatory and statutory approvals.

Related stories

The entities are also awaiting approval of their mutual funds license with the market regulator, the Securities and Exchange Board of India (SEBI).

Earlier, Rachel Lord, Chair & Head of APAC, BlackRock, said: “India represents an enormously important opportunity. The convergence of rising affluence, favourable demographics, and digital transformation across industries is reshaping the market in incredible ways.

We are very excited to be partnering with JFS to revolutionise India’s asset management industry and transform financial futures. Jio BlackRock will place the combined strength and scale of both of our companies in the hands of millions of investors in India.”

Shares of Jio Financial Services were trading at Rs 354.40 apiece, down 4.82 per cent on Tuesday.

Disclosure : Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

DAILY-EVENING

Discover the latest business news , Sensex , and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Trending news

• Ex-Google, Amazon recruiters tell job seekers: Don't use 'open to work' badge on LinkedIn
• Anupam Mittal says wrong leadership can 'kill a company', shares steps to hire 'the right senior folks'
• Project Nimbus: 10 pointers on the Google-Amazon-Israel contract that led to protests, arrests
• Influencer jailed for starving 1-month-old son to death, putting him on 'sunlight diet'

You got 30 Day’s Trial of

• Ad-Free Experience

• Actionable Insights
• MC Research
• Economic Calendar

You are already a Moneycontrol Pro user.

Access your Detailed Credit Report - absolutely free

• Personal Finance
• Today's Paper
• Partner Content
• Entertainment
• Social Viral
• Pro Kabaddi League

Jio Fin Services zooms 5% on announcing new broking, wealth management biz

The company led by mukesh ambani, on monday announced that it intends to enter the stockbroking and wealth management sectors through a joint venture with us-based blackrock.

Jio Financial Services Limited

Listen to This Article

Jio financial services denies being in talks to acquire paytm's wallet biz, paytm denies being in talks with jio financial to sell its wallet biz, republic day offer: jio offers partner coupons, special benefits, and more, jio financial services, hdfc bank frontrunners to buy paytm's wallets biz, jiophone prima 4g with youtube, whatsapp, more apps goes on sale at rs 2599, stock market live: sensex off lows, down 300 pts; nifty nears 22,200; broader indices gain, stocks to watch today: jio financial, cipla, vi, brigade, vedanta, aster dm, nifty bank, nifty financial services charts signal downtrend in near-term, from sbi to quant, smallcap schemes witness easing of stress levels, sebi to auction 22 properties of rose valley on may 20 to recover money.

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Apr 16 2024 | 10:22 AM IST

Explore News

• Suzlon Energy Share Price Adani Enterprises Share Price Adani Power Share Price IRFC Share Price Tata Motors Share Price Tata Steel Share Price Yes Bank Share Price Infosys Share Price SBI Share Price Tata Power Share Price HDFC Bank Share Price
• Latest News Company News Market News India News Politics News Cricket News Personal Finance Technology News World News Industry News Education News Opinion Shows Economy News Lifestyle News Health News
• Today's Paper About Us T&C Privacy Policy Cookie Policy Disclaimer Investor Communication GST registration number List Compliance Contact Us Advertise with Us Sitemap Subscribe Careers BS Apps
• Budget 2024 Lok Sabha Election 2024 IPL 2024 Pro Kabaddi League IPL Points Table 2024

Please rotate your device

We don't support landscape mode yet. Please go back to portrait mode for the best experience

Jio Financial Services: Mukesh Ambani's blueprint to disrupt India's financial sector

• Byline: Anand Adhikari
• Producer: Arnav Das Sharma

With the listing of Jio Financial Services‚ Reliance Chairman Mukesh Ambani has lined up all his ducks. Will the new NBFC disrupt the financial space the way Jio roiled mobile telephony despite being a late entrant?

In 2004, Jack Ma, the Co-founder of China’s Alibaba, an e-commerce business then just five years old and yet to become a world-beater, launched payments platform Alipay for its retail customers and merchants. In a decade, Alipay (later reborn as Ant Financial) became China’s leading financial services giant, offering a digital wallet, consumer credit, money market funds, wealth management, and a digital-only bank for small enterprises. Ant Financial soon had $600 billion in assets under management as it layered various financial services atop the e-commerce platform. What also worked was China’s underserved and unbanked population, with an aspirational middle class—and a surge in smartphone use. China’s financial services sector, dominated by state-owned banks, was also ripe for disruption. Ma had struck gold.

Mukesh Ambani’s Jio Financial Services, dubbed the group’s ‘fourth engine’ after oil, telecom, and retail, aims to mirror Ma by leveraging its established consumer-facing businesses: retail and telecom.

The similarities with Ma’s model are hard to ignore, as the key is the proprietary payments or retail transaction data that will help Jio create a business model around lending, asset management, insurance, and stock broking. The 66-year-old Ambani, Reliance Industries Ltd’s (RIL) Chairman & MD, is taking one step at a time. Ambani established a beachhead in the financial services industry by acquiring a payments bank licence in 2015, two months after the Reserve Bank of India invited applications for this new class of banks. Payments banks are meant for payments and remittances, can accept small savings, and issue debit cards but not credit cards.

The market is large enough. .. Even [after] being present in 4‚000 cities [with] assets close to Rs 3 lakh crore‚ we still have less than 2 per cent [share in] India’s credit market Sanjiv Bajaj CMD Bajaj Finserv

The market got a whiff of the group’s ambitions, but Reliance never scaled up the business. Then, in November 2022, ICICI Bank veteran K.V. Kamath joined the RIL board as an independent director. Jio Financial Services Ltd was spun out from Reliance in July this year. 

On July 8, a week after Jio Financial Services (JFS) was born, it announced that Ambani’s daughter Isha had joined its board. On August 21, at the listing ceremony of JFS, Kamath, now its Chairman, said, “It’s possible to predict that within the next eight to nine years, our GDP could double, reaching around $8 trillion. This presents a tremendous opportunity for India.”

The $118-billion group has the war chest, management bandwidth, group synergies, and the ability to attract top-notch talent—like it has for its senior management team from ICICI Bank, State Bank of India and BRICS-sponsored New Development Bank. 

“They have an exceptional ability to see large business opportunities,” says Nirav Shah, Managing Director (Investment Banking) at Equirus Capital. “Their knack for timing disruptions is impeccable. The execution from the ground up is outstanding.”

Ambani explained the JFS gambit to shareholders at RIL’s annual general meeting (AGM) on August 28. “JFS has been conceptualised to fill a critical gap in the financial services needs of a large section of the Indian economy, mainly in the informal and underserved sectors in rural, semi-urban, and urban areas,” he said. 

Typical of Ambani, JFS wants the lion’s share of the fast-growing financial services market via organic and inorganic growth—grabbing products, geographies and licences. It has a modular framework with independent CEOs for each business. So Vinod Easwaran is the CEO of Reliance Payments Bank, and A.R. Ramesh heads Reliance Payment Solutions Ltd.  

RIL has had a history of ruffling the feathers of established players when it enters a sector. When it entered telecom with Jio in 2016, it bled the leaders with its low pricing. “Forget telecom or retail; when they started growing mangoes at the Jamnagar refinery complex, they quickly became Asia’s largest mango exporter,” says a banker. However, financial services are certainly not low-hanging fruit. 

Boots on the Ground

Two years ago, investors and experts couldn’t understand why Ambani bought Justdial, an online Yellow Pages firm that featured dealers and SMEs. Reliance was after Justdial’s treasure trove of partner merchant data. Justdial was also powering small players with technology and payment capabilities. A few years ago, RIL partnered with Microsoft to adopt leading technologies, such as data analytics, AI, blockchain, etc., for SMEs. Ma’s Ant initially provided digital tools to vendors, gaining insights into their operations. Ambani appears to be following a similar path. (Ma unsuccessfully ran a Chinese Yellow Pages business.)

But what’s bigger is RIL’s telecom data of 426 million users—usage patterns, roaming, data consumption, family usage, and default records. Reliance Retail has data on 18,000-plus stores, with customers in grocery, consumer electronics, fashion, lifestyle, and pharma. (See box A Galaxy of Opportunities.) The delivery model is a cost-effective digital-first approach using the web, apps, and physical stores to offer products.

A public sector banker says, “They have the advantage of starting with a clean slate when traditional, well-established players are struggling with technological changes.” The cloud-based, scaleable technology model of JFS gives it huge savings. With Ma, it was timing; JFS has before it the entire India Stack of Aadhaar, e-sign, eKYC, UPI, ONDC, and the Account Aggregator framework to scale its operations.

So, what’s on offer from JFS?

K.V. Kamath‚ Chairman, Jio Financial Services

High-yield Lending Takes the Lead

JFS is a non-banking financial company (NBFC) holding the reins of a lender entrenched in consumer durables, an asset management company (AMC), an insurance firm looking for a big-name partner, and an equity broker. 

Reliance Retail Finance Ltd offers unsecured and secured loans to consumers and merchants. It has been offering loans in a small way since 2019. It will leverage the group’s retail operations in the consumer electronics, grocery, and fashion segments. Initially, JFS is targeting consumer durables financing via the EMI model through the 400-plus Reliance Digital stores. Reliance Digital and commerce generated nearly Rs 50,000 crore in revenue in 2022-23. 

“The primary focus of consumer durables financing has traditionally been electronics and mobile devices, which still make up a significant portion of the market,” says Vikas Garg, Co-founder and CEO of fintech start-up Paytail. But JFS also has the grocery and fashion formats to capitalise on the credit boom. It will begin with consumer durables subsidised by manufacturers, OEMs, or dealers to build a database on repayments and defaults. Then, it will cross-sell other products, including secured loans, to those with a good credit history.

The merchant lending vertical will offer financing to merchants in grocery, digital fashion, and pharma— formats that don’t have access to cheap funds. The products include short-term personal loans, trade financing, loans for store upgrades, and unsecured business loans.

It is already helping merchants with payment capabilities. JFS has a good database of kirana stores to underwrite them for short-term working capital loans, especially during peak seasons such as festivals. JioMart offers an online shopping platform by partnering with local mom-and-pop stores. 

AMCs... don’t demand significant capital unless there’s a strategy to heavily discount or offer low fees. It’s a profitable business at scale Tej Shah Portfolio Manager Marcellus Investment Managers

The loans vertical for MSMEs or micro, small and medium enterprises will offer working capital financing to distributors and suppliers, who end up tapping high-interest informal channels for small loans. A recent report from Avendus Capital highlighted that the small-ticket MSME lending sector faces a credit shortfall exceeding $120 billion. 

Ambani is also catching the passive-investing wave, which comprises index funds and exchange-traded funds (ETFs). Last month, JFS sealed a deal with the world’s biggest AMC, BlackRock, for a 50:50 joint venture in a market that has nearly four dozen players. BlackRock is a dominant player in passive investment, which involves tracking indices rather than individual stocks. Its ETFs are very popular globally. Jio-BlackRock, with a $150-million investment, hopes to stand out. In less than a decade, the AUM of passive funds accounts for a fifth of the market. Jio’s strategy of using the group’s ecosystem and digital-first approach could help reduce distribution expenses, which it could pass on to small unit holders. BlackRock is no stranger to the Indian market; it cut its teeth with a joint venture in DSP Mutual Fund before parting ways about five years ago.

The AMC business has good margins. For instance, HDFC AMC reported a 26 per cent return on equity, an income of Rs2,482 crore and a profit of Rs 1,423 crore in 2022-23. “AMCs operate efficiently with minimal capital. They don’t demand significant capital unless there’s a strategy to discount heavily or offer low fees,” says Tej Shah, Portfolio Manager at Marcellus Investment Managers.

Following the 2016 demonetisation, when Vijay Shekhar Sharma’s Paytm and Google Pay were amassing payments customers in the QR code frenzy by offering cash backs, Ambani, who had a payments banking licence, kept out of the fray.

Jio Payments’ senior executives would regularly present a business case in their review meetings. Ambani would listen patiently without uttering a word, perplexing the senior executives. In hindsight, the billionaire’s plan to leverage his retail and telecom networks becomes clear. 

Jio’s payments bank licence allows it to offer current accounts and savings accounts (the so-called CASA combo of cheap funds) but doesn’t allow lending activity. Jio has a UPI app that allows customers to recharge their mobiles, pay utility bills, shop online, and purchase travel tickets, among other things. It also offers third-party investment, insurance, and borrowing products. Jio Payments Bank can apply for a small finance bank licence.

The equity broking industry is undergoing rapid transformation. Discount brokerage firms have quickly scaled their operations, intensifying competition Arun Chaudhry Chief Business Officer m.Stock, Mirae Asset Capital Markets

Ambani is scouting for reputable global partners in life-, general-, and health insurance businesses. The insurance industry has everything going for it: low insurance penetration, a young population, rising life expectancy, growing consumer awareness about financial security, etc. Health insurance is emerging as the fastest-growing segment. “It will use predictive data analytics to co-create contextual products with partners and cater to customer requirements in a truly unique way,” said Ambani at the AGM. Currently, Reliance Retail Insurance Broking distributes insurance products and earns commissions. While life insurance is a cash guzzler because of agent commissions, the general and health insurance businesses don’t require much capital.

Equity brokerage is yet another area where JFS will likely make its presence felt. Technology advances, regulatory changes and shifting investor preferences are rocking India’s Rs 38,000-crore equity-broking industry. Zerodha revolutionised the equity brokerage business and grabbed a significant market share by offering a zero-brokerage model. New players, such as Groww, Upstox, and 5paisa, generate revenue from subscription fees, margin interest, or premium services.

“The business landscape has also evolved, with companies now offering fund-based products such as margin funding,” says Arun Chaudhry, CBO at m.Stock, a trading app that is part of South Korea’s Mirae Asset group. The surge in demat accounts after the Covid-19 pandemic’s lockdowns and disruptions has fuelled a growing market for cross-selling services like mutual funds, wealth management, research, and financial planning. It is a sector ripe for disruption. Enter JFS.

JFS has to quickly adapt and find its unique strengths in various business models, whether advisory services, margin funding, or financial planning, to achieve growth and success. “The increased regulations have made the industry more transparent and trustworthy, giving people confidence that their interests are being safeguarded,” says Chaudhry.

The Uphill Battle

Corporates have historically faced challenges in the BFSI sector, often unable to innovate and scale up. “Past efforts at ecosystem monetisation have also fallen short,” believes Tej of Marcellus. The lone exception is Bajaj Finance, which has not only made consumer durables financing a success but also given banks and NBFCs a run for their money. Industry experts highlight that the leaders in commercial-vehicle financing are not manufacturers such as Ashok Leyland or the Tata group, which have finance units. The leaders are Cholamandalam and Sundaram Finance. A captive business doesn’t necessarily mean success. It will not be a cakewalk for JFS, which will now have to deal with multiple regulators in lending, payments, mutual funds, and insurance. New NBFCs from Piramal, Poonawalla, and Godrej are also spreading their wings. In addition, JFS will come under RBI’s top tier NBFCs (numbering 15) with significantly higher supervision. JFS is entering at a time when RBI is encouraging large-scale NBFCs to transition into full-fledged banks. The regulations governing NBFCs are almost like those governing banks regarding NPA recognition or liquidity requirements. That was one of the reasons mortgage giant HDFC Ltd merged with HDFC Bank.

Some experts suggest that there could be a change in RBI’s policy towards large conglomerates. Three years ago, an internal RBI group recommended allowing industrial houses into the banking sector. They also suggested that large NBFCs with assets over Rs 50,000 crore could become banks. And even if RBI allows industrial houses, banking is a diversified business and highly competitive with segments like corporate loans, MSME loans, agri-business loans, and retail loans. “There can’t be a monopolistic or oligopolistic sort of market in financial services. Jio’s kind of disruption (telecom, retail) is not possible in the BFSI space,” the experts say.

When an analyst asked Bajaj Finance’s Managing Director, Rajeev Jain, about the competition, he said, “What I can control is working towards achieving our goal of reaching 100 million consumers, which aligns with our ambition. Our aim is to capture a significant portion of these 100 million consumers’ payments and financial services needs, with a strong emphasis on providing a seamless experience. That’s my focus.”

“Jio could do some disruption in terms of technology or exploiting the synergy within the group,” says Ajit Kabi, Banking Analyst at broking firm LKP Securities. The targeted market of JFS, smaller cities and towns, is also on the radar of established banks such as HDFC Bank and ICICI Bank. Lending is a highly leveraged business. Mahesh Shukla, CEO and Founder of PayMe India, an NBFC, says it is essential to consistently secure capital at a low cost while monitoring for any decline in asset quality. “Collection is a matter of customer service, as it is important to treat customers with respect and not be overly aggressive,” says Shukla.

In the MSME segment, market players have historically faced high non-performing assets or NPAs. “When the cycle changes, it is all about collection,” says a private banker.

Similarly, Bajaj Finserv, Zerodha Broking, and Samir Arora’s Helios Capital, among others, are entering the mutual funds space, and some are trying passive funds, which JFS wants to do. Sanjiv Bajaj, Chairman and Managing Director of Bajaj Finserv, which has an AMC licence, recently said he plans to sell mutual funds to the company’s 100 million existing customers.

There is also a big challenge on the funding side, as NBFCs are not allowed to raise CASA deposits, the low-cost funds loved by banks. There is also a threat of asset-liability mismatches if one lends long-term, as the funds available are short-term. 

“They have many advantages to begin with, but they will need to undergo a learning process to refine their strategy or business model,” says Rohit Garg, Co-founder & CEO of lending platform SmartCoin.

RBI is already very cautious about allowing a higher share of unsecured lending. A consultant notes that due to Jio’s significant scale, it inherently poses some systemic risks. In addition, RBI is scrutinising the strategies of banks and NBFCs, particularly those exploring riskier avenues such as unsecured lending or offering credit to lower-rated firms. It took three decades for housing major HDFC Ltd to acquire a lending book of Rs 5.68 lakh crore. But for JFS, scaling up will be very fast. Will RBI be comfortable?

The market value of JFS is Rs 1.6 lakh crore, larger than Mahindra Finance, Cholamandalam, Muthoot, LIC Housing, etc. The third-largest NBFC by market cap, JFS is already causing unease for industry leader Bajaj Finance, whose stock has remained stagnant over the past two years.

With a net worth of Rs 1.2 lakh crore, JFS is off to a strong start. The biggest advantage for JFS is the likely AAA rating, which will allow it to raise funds at the lowest cost. The access to low-cost funds puts the company in a much better position to play the interest rate game and increase margins in the lending business. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, remarks that the market valuation of JFS hinges on its anticipated future growth and its 6.1 per cent ownership in RIL.

“JFS is getting a premium valuation because the group’s execution has been phenomenal. But you are paying for it now,” says a global private equity player. Insurance behemoth Life Insurance Corporation of India (LIC), a long-term player, has already acquired 6.6 per cent of the fledgeling company.

Ma’s outspokenness and high-profile global presence cut short his rise to the top and put the brakes on the world’s largest IPO three years ago. That, in a way, positively helped Ambani, who had already unseated Ma from Asia’s top billionaires list two years ago. There are now a lot of expectations. As Ambani dives into banking and finance, he’s up against biggies such as SBI, HDFC Bank, ICICI Bank, and Kotak Mahindra Bank with a similar financial supermarket model. The industry is also heavily regulated, from lending to even collection or recovery. Ambani also has to tread carefully when dealing with group MSME customers to avoid any conflict of interest and keep an eye on the new data protection laws that safeguard people’s personal information. This makes his new venture quite challenging, unlike telecom and retail. 

“Jio Financial products will not just compete with current industry benchmarks but also explore path-breaking features such as blockchain-based platforms and CBDC,” says Ambani. He’s got his finger on the pulse of the next big disruptors in global finance. Will Ambani make strides where Jack Ma stumbled? For now, the jury is still out

UI Developer : Harmeet Singh Creative Producer : Raj Verma Videos : Mohsin Shaikh

Jio Financial, Blackrock form JV to set up wealth management and broking business

Jio Financial Services, part of billionaire Mukesh Ambani led-Reliance Group, and BlackRock formed a 50:50 joint venture to launch asset management services in India in July 2023.

The two companies had planned an initial investment of $150 million each in the joint venture.