Jio Financial-BlackRock files papers for MF licence; stock surges

Jio Financial Services Ltd and BlackRock Financial Management have filed papers with the capital market regulator to launch a mutual fund business in India. As per the Securities and Exchange Board of India (SEBI), the in-principle approval is under consideration with the regulator.

The Jio Financial-BlackRock JV filed for mutual fund application on October 19, 2023. Another company, Kolkata-based Abira Securities, has reapplied for the mutual fund license, shows the SEBI data updated as of December 31, 2023.

Amid the development, Jio Financial Services stock is trading in the green today at ₹240.2, up 2.45% compared to the previous session close. At the current share price, the stock is trading 13.6% down compared to a one-year high of ₹278.2 touched on August 21, 2023. The company's m-cap stands at ₹1.52 lakh crore.

In the past year, Jio Financial's share has dipped 3.48%, while the share saw a 3.46% fall in the past month. The stock saw a 4.48% rise in the past month and a 2.67% rise in the past week.

RIL’s newly formed investment company had tied up with U.S. investment major BlackRock's India unit to form Jio BlackRock, a 50:50 joint venture (JV), to its make a foray into the asset management industry in July 2023.

The partnership brought a new player to the Indian asset management market, with JFS and BlackRock targeting an initial investment of $150 million each in the JV. The company, which has its management team, will launch operations post-receipt of regulatory and statutory approvals.

The name of Reliance Strategic Investments, a wholly-owned subsidiary of Mukesh Ambani-led Reliance Industries, was last year changed to Jio Financial Services, a non-banking financial company. Reliance Strategic Investments was then demerged from its parent RIL on July 20, 2023, following which Jio Financial Services (JFSL) was temporarily added as a 51st constituent in Nifty 50 and 31st constituent in Sensex.

RIL says it will hold a 33.33% stake in each of the Indian special purpose vehicles (SPVs) and become an equal partner.

Notably, Bajaj Finserv, the financial arm of the Bajaj group, also received the market regulator's licence to start its mutual fund business in March 2023. The company received the final registration from SEBI to start its mutual fund operations under Bajaj Finserv Mutual Fund.

There are a total of 45 registered companies that have received mutual fund licences, which collectively manage assets worth more than ₹50 lakh crore. According to the latest data released by the Association of Mutual Funds in India (AMFI), the mutual fund industry's total AUM (assets under management) stood at ₹49,04,992.39 crore in November 2023. The mutual fund folios reached an all-time high of 16,18,14,583 in November 2023 as compared to 15,96,46,790 for October 2023.