JFS forms another JV with Blackrock to set up wealth management, broking biz

Mukesh Ambani-led non-banking financial company (NBFC) Jio Financial Services (JFS) Ltd has signed an another agreement to form a 50:50 joint venture with US-based asset management firm Blackrock to undertake wealth business. JV will include the incorporation of a wealth management company and the subsequent formation of a brokerage company in India.

JFS says the joint venture strengthens its relationship with Blackrock, Inc., with whom it already has a 50:50 joint venture in asset management. The new JV will now be subject to regulatory and statutory approvals.

Shares of JFS surged 3.77% in the early morning trade to hit the day's high of ₹371.75 on the BSE after opening in the green. At the current share price, the scrip is trading just below a 52-week high of ₹378.7 touched on April 8, 2023. With this, the company's m-cap has also surged to ₹2,33,229.06 crore.

Since its listing in August 2023, the share of JFS has given a 47.43% return, while the calendar year return is 56.34%. On a six-month basis, the share of JFS has surged more than 63%. The scrip has surged 3.84% and -0.58% in the past month and week basis.

JFS and BlackRock India had formed Jio BlackRock, a 50:50 joint venture (JV), to make a foray into the asset management industry.

Through that tie-up, both companies proposed an initial investment of $150 million each in the JV. The Jio BlackRock JV is set to leverage the respective strengths and brands of both BlackRock and JFS to deliver “tech-enabled access to affordable, innovative investment solutions” to Indians.

Additionally, JFS and BlackRock Financial Management have filed papers with the capital market regulator to launch a mutual fund business. The in-principle approval is under consideration with the regulator.

The name of Reliance Strategic Investments, a wholly-owned subsidiary of Mukesh Ambani-led Reliance Industries, was changed to Jio Financial Services last year. Reliance Strategic Investments was then demerged from its parent RIL on July 20, 2023, following its listing on the stock exchanges.

JFS reported a consolidated profit of ₹294 crore in the October-December 2024 (Q3 FY24) quarter, down 56% on a quarter-on-quarter basis. The company's net profit in Q2 FY24 was ₹668 crore and in Q1 FY24 it stood at ₹332 crore.

KR Choksey, in its January 2024 report, said JFS will continue to see volatility in earnings for at least the next six months, until it sees all the approvals in place and post the ramp-up of businesses at a faster pace. "The long-term strengths of the company holding comfortable levels of capital, experienced leadership, brand equity, and proximity to customers through its parent company—remain untouched...we maintain our BUY rating on the shares of Jio Financial Services Ltd."