Jio Financial Services Removed from FTSE Indexes

Reliance Industries' demerged unit, Jio Financial Services, is set to be removed from FTSE indexes, a surprising move following its demerger on July 13. The decision, disclosed by FTSE Russell, the global index provider, comes in response to Jio Financial's underwhelming trading activity since the demerger. The removal, effective August 22, reflects Jio Financial's failure to initiate trading within 20 business days after the demerger, coupled with the absence of a firm trading date announcement.

Jio Financial Services Set for Listing, But FTSE Index Removal Raises Concerns

FTSE Russell's official statement emphasized Jio Financial Services' removal from multiple FTSE Indices, including the FTSE RAFI All World 3000 Index, FTSE RAFI All World 3000 Index - QSR, FTSE RAFI Emerging Index, and FTSE RAFI Emerging Index - QSR. The deletion stems from Jio Financial's inability to meet the trading criteria set forth by FTSE Russell.

Notably, the decision arrives amidst Reliance Industries Ltd's efforts to list shares of its financial services unit. Anticipation had been building for a listing date, potentially coinciding with the company's upcoming annual general meeting on August 28. Mukesh Ambani, Chairman of Reliance Industries, expressed Jio Financial Services' role in revolutionizing India's financial services sector through innovative and accessible digital-first solutions.

Despite the recent collaboration between Jio Financial Services Ltd and BlackRock to establish an asset management company with a combined investment of $300 million, trading of Jio Financial shares has yet to commence. Should the trading day remain uncertain beyond the 20 business days, FTSE Russell's Spin-offs policy will come into effect, subjecting the company to further review.

Upon listing, Jio Financial Services, formerly known as Reliance Strategic Investments, is poised to become the third-largest non-banking financial company, trailing only Bajaj Finance and Bajaj Finserv. The exact listing date, eagerly awaited by shareholders, is anticipated to be revealed at the RIL annual general meeting on August 28. At a discovered price of ₹261.85 per share, Jio Financial Services' market capitalization is projected to be approximately ₹1.7 lakh crore at the time of listing.

Currently, shares of Jio Financial Services have been allocated to the demat accounts of Reliance Industries shareholders, though trading remains on hold until the listing date is announced. The situation underscores the significance of the demerger and subsequent trading commencement for both Reliance Industries and the financial markets.

Flashback: Jio Financial Services and BlackRock Forge a Game-Changing Partnership

In a strategic move that captured the attention of the financial world, Jio Financial Services Ltd, the financial lending arm demerged from Reliance Industries Ltd, and BlackRock, the world's largest asset manager, joined forces to establish an asset management powerhouse with a remarkable investment commitment of $300 million. The groundbreaking partnership, named "Jio BlackRock," aimed to revolutionize the landscape of investment opportunities in India through cutting-edge technology and innovative solutions, ensuring accessibility and affordability for countless investors.

The collaborative venture marked a significant milestone as Jio Financial and BlackRock committed an equal share of $150 million each, solidifying their dedication to creating a dynamic presence in the Indian mutual fund industry. This move propelled them into a competitive field, already dominated by established giants like SBI Mutual Fund, ICICI Prudential Mutual Fund, and HDFC Mutual Fund.

Interestingly, this wasn't BlackRock's inaugural venture in the Indian mutual fund sector. A prior collaboration with DSP, named DSP BlackRock Investment Managers, concluded in 2018. BlackRock's decision to exit this venture was attributed to operational challenges arising from its minority stake status. However, Jio BlackRock was poised to overcome such hurdles and was slated to commence operations after receiving the requisite regulatory approvals. Notably, the new entity was equipped with a dedicated management team to steer its strategic direction.

BlackRock's global expertise in investment and risk management, coupled with its technological acumen, harmonized seamlessly with Jio Financial's deep understanding of the local market, robust digital infrastructure, and execution capabilities. The collaboration promised to deliver a new era of investment options with an unparalleled blend of innovation, technology, and market insights.

This collaboration between Jio Financial Services and BlackRock truly embodied the potential for a revolutionary transformation in India's investment landscape. With its technological prowess, market insights, and global experience, Jio BlackRock was poised to carve a distinctive niche, offering Indian investors a gateway to a new realm of financial possibilities.