Jio Financial Services and BlackRock to form $300-mn JV to offer investment solutions

Jio Financial Services Limited (JFS), the demerged entity of Mukesh Ambani-led Reliance Industries Ltd, and BlackRock on Wednesday announced an agreement to form Jio BlackRock, a 50:50 joint venture, "to deliver techenabled 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," said JFS in a statement.

JFS and BlackRock are targeting initial investment of $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, 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.

Reliance Industries Ltd on Wednesday said the name of its demerged entity Reliance Strategic Investments has been changed to Jio Financial Services with effect from July 25.

RIL recently demerged its financial services arm – Jio Financial Services. All Reliance shareholders will get Jio Financial Services shares in 1:1 ratio.

Jio Financial Services (JFS) has been valued at around $20 billion after its stock price was set at a much higher-than-expected Rs 261.85 in its demerger from Reliance Industries.

The demerger, which was announced last October, is seen as oil-to-retail conglomerate Reliance's way of expanding in the lucrative financial services sector, especially as it already has a non-bank financial company licence.

At a $20 billion valuation, Jio Financial would be one of the top 40 Indian companies by market capitalisation, in a list headed by Reliance at $233 billion.

In a first, last week, NSE and BSE held a special hour-long "pre-open call auction" trading session for Reliance to determine JFS' share price.

JFS will be included in major Indian indices, including the benchmark Nifty 50, but will not trade until it is listed, the date for which Reliance will likely set at its upcoming annual general meeting.

JFS' access to vast amounts of data from Reliance's telecom and retail businesses will also help it kick-start lending, analysts have said. Macquarie Research said JFS would likely be an AAA-rated entity that could borrow at attractive rates.

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