Jio Financial Services Up 5% After BlackRock Joint Venture Announcement

Jio Financial Services Ltd witnessed a sharp rise in today's trading session following its announcement of a collaboration with BlackRock, a non-banking financial company (NBFC). The stock surged by 4.90 percent, reaching a day high of ₹371.75. However, it remained 1.84 percent lower than its all-time high value of ₹378.70, recorded last week on April 8.

The collaboration with BlackRock further solidifies Jio Financial's relationship with the global investment firm. This partnership aims to revolutionize India's asset management industry through digital-first offerings and broaden access to investment solutions for Indian investors.

Jio Financial Services, the financial arm of Mukesh Ambani's Reliance Industries, underwent a demerger recently to be listed as a separate entity. Despite reporting a 56% decline in consolidated net profit for the quarter ended December 2023 compared to the previous quarter, Jio Financial has been expanding its operations. The company also noted that the launch of its wealth management and broking business is contingent upon regulatory and statutory approvals.

“This joint venture further strengthens the Company’s (Jio Financial) 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,” JFS said.

India's broking and wealth management sector is experiencing substantial growth, buoyed by the surge in demat accounts in recent years. Wealth managers in India currently oversee approximately $1–1.2 trillion in financial assets belonging to high net-worth individuals (HNIs). Forecasts predict a significant increase in the number of HNIs and ultra-high-net-worth individuals (UHNIs) in India, contributing to the sector's growth.

"With BlackRock backing, we expect Jio to come up with innovative products. The company is set to create a lot of disruptions in the space," Gaurav Dua, Senior VP & Head - Capital Market Strategy at Sharekhan by BNP Paribas, told Business Today TV.

"The stock has formed a fresh base around 340-350. It looks promising even at current level as fresh money is chasing the scrip. And, expected upside target for Jio Financial would be ₹450," said Ashish Chaturmohta, Executive Director and Fund manager at JM Financial.

In July 2023, Jio Financial Services and BlackRock announced a 50:50 joint venture with a USD 150 million investment each to venture into India's asset management sector. The application submitted to the Securities and Exchange Board of India (Sebi) is currently "under process."

Jio Financial Services operates as a non-deposit-taking NBFC, offering retail lending, merchant lending, payments bank operations, payments solutions, and insurance broking. The company targets diverse customer segments across urban, semi-urban, and rural areas of India, aiming to provide sustainable financial services.

Jio Financial manages its financial operations through subsidiary entities such as Jio Finance Limited (JFL), Jio Insurance Broking Limited (JIBL), and Jio Payment Solutions Limited (JPSL), along with a joint venture, Jio Payments Bank Limited (JPBL).

Since its listing on August 21, 2023, Jio Financial Services has provided investors with a 6.3% return in the last month and a 47.28% return in the past three months.