Capital market regulator Securities and Exchange Board of India (Sebi) has granted in-principle approval to Jio Financial Services and BlackRock Financial Management Inc to act as co-sponsors and set up proposed fund.
The Reliance Industries’ NBFC arm and BlackRock Advisors Singapore Pte. Ltd have formed joint venture company named ‘Jio BlackRock Investment Advisers Private Limited‘ to undertake investment advisory business, company said through stock exchange filing.
Sebi conveyed its approval via a letter dated October 3, a company filing to the exchanges on Friday revealed.
However, the final approval for registration will be granted by Sebi subject to fulfillment of the requirements by Jio Financial and BlackRock, set out in regulator’s letter to the company.
Jio BlackRock Investment Advisers Private Limited was incorporated on September 6 to carry on the primary business of investment advisory services, subject to regulatory approvals, the statement said further. The Certificate of Incorporation was received from the Ministry of Corporate Affairs on September 7, 2024, it added.
Ambani’s Jio Financial will invest an amount of Rs. 3 crore towards initial subscription of 30,00,000 equity shares of face value Rs. 10/- each.
Jio Financial Services has recently received approval from the Department of Economic Affairs to increase its aggregate limit of foreign investment (including FPIs) to 49% of the paid-up equity share capital on a fully diluted basis. Foreign investors currently hold 17.55% stake in the company out of the close to 53% public float of shares, exchange data showed.
Jio Financial Services is expected to shape up the fintech sector by tapping into India’s large potential for retail lending and payment services. These businesses tie in with Reliance’s existing digital and retail businesses, thus providing it a vast scope of growth.
Jio Financial Services Ltd., the non-banking company of Reliance Industries Ltd, was demerged from its parent in July 2023. While the company has forayed into various businesses such as secured and unsecured lending, digital equipment leasing, supply chain financing, insurance broking, payment bank and payment aggregator and payment gateway services.
Jio Financial’s consolidated net profit fell 6% year-on-year to Rs 313 crore in the quarter ended June 2024 from Rs 332 core a year ago mainly due to a fall in interest income and amidst an uptick in operating expenses. Interest income fell 20% to Rs 162 crore in June 2024 from Rs 202 crore a year ago while expenses increased to Rs 79 crore from Rs 54 crore a year ago, mainly as staff expenses increased more than three times.
