SUMMARY
The JV will enable JFS to offer digital-first products and “democratise” access to investment solutions
JFS said that the launch of the two entities is subject to regulatory and statutory approvals from relevant authorities
In July 2023, Jio Financial Services and BlackRock signed a JV and earmarked $300 Mn to foray into the Indian asset management space
Reliance’s Jio Financial Services (JFS) on Monday (April 15) signed a joint venture (JV) with investment giant BlackRock to float its wealth management and brokerage ventures.
In its filing with the bourses, Jio Financial Services said that it has partnered with two entities of the US-based firm (BlackRock, Inc and BlackRock Advisors Singapore) to launch the two new entities.
“The Company, BlackRock, Inc. and BlackRock Advisors Singapore Pte. Ltd. today, at 6.35 PM have signed an agreement to form a 50:50 joint venture between the Company and Blackrock, for the purpose of undertaking wealth business including incorporation of a wealth management company and subsequent incorporation of a brokerage company in India,” said JFS.
However, the financial services company said that the launch of the two entities is subject to regulatory and statutory approvals from relevant authorities.
The conglomerate-backed financial services company said that the move will enable it to offer digital-first products and “democratise” access to investment solutions.
Curiously, the new JV comes after Jio Financial Services and BlackRock together, in late December 2023, filed an application with the Securities and Exchange Board of India (SEBI) for a mutual fund licence.
The fresh development comes more than nine months after the two companies first signed a JV to foray into the Indian asset management space under the brand name Jio BlackRock. At the time, in July 2023, the two entities said that they would target an initial cumulative investment of $300 Mn in the joint venture.
The flurry of launches by Jio Financial Services comes in the backdrop of a slew of new-age tech companies bolstering their asset management company (AMC) ambitions. Last month, reports surfaced that Zerodha Fund House was in talks with several investors to raise up to $100 Mn.
In 2023, both Zerodha and Groww received approval from the market regulator SEBI to launch its first index fund. This paved the way for the two stockbroking platforms’ entry into the mutual fund space as they launched their respective funds.
Meanwhile, fintech firms such as Angel One and PhonePe, too, have emerged as leading distributors of mutual fund products, and will undoubtedly compete with Jio Financial Services and others.
The new offerings in the Indian AMC space look to capitalise on the rising affluence, favourable demographics and digital adoption in the country. At the heart of this is the INR 49.04 Lakh Cr Indian mutual fund industry, which has been on an upward spiral since the beginning of the pandemic.
