The newly demerged financial arm of Reliance Industries is all set to join hands with an American multinational investment company to expand its wealth management and broking services in India. Jio Financial Services has officially announced the news and states that the company has joined hands with a US-based investment company identified as BlackRock. As mentioned above, the motive behind combining the ventures for the expansion of wealth management and ease the broking services in the nation. The announcement was made on Monday, April 15 after signing the agreement to form a 50:50 joint venture.
The Aim Of Forming A 50:50 Joint Venture
While making the news official, Jio Financial Services stated that the aim is to form a joint venture with BlackRock Inc. to lay down the foundation of a wealth management and broking business in India in less than a year after introducing an asset management enterprise. According to the financial organization, the joint venture will involve the creation of a wealth management firm and, later on, a brokerage company, to capitalize on India’s expanding and profitable wealth market. In addition to this, the recent report of Jefferies displayed that the wealth managers of India look after $1-1.2 trillion of financial assets acquired by the high net-worth individuals of the nation.
During an exchange filing, Jio Financial Service, part of billionaire Mukesh Ambani-led Reliance Group states that “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, to undertake wealth business including incorporation of a wealth management company and subsequent incorporation of a brokerage company in India.”
It is not the first time, the financial arm of Reliance Industries joined forces with BlackRock; in July 2023 as well, Jio Finance Services made an agreement with the US-based investment management company in which both companies agreed to invest approximately $150 million each. In this agreement as well, both parties formed a 50:50 joint venture with the vision to establish an asset management sector in India. Now, the creation of the new joint venture will strengthen the relationship of both companies, said the financial arm of Reliance Industries.
The company included in the statement that “This joint venture further strengthens the Company’s 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 democratize access to investment solutions for investors in India.”
Although, both companies are waiting to get regulatory and statutory approvals to start their business. Without getting the approvals the launch is contingent. Apart from that, BlackRock and Jio Financial Services are also looking to get approval for their mutual funds license from the market regulator, the Securities and Exchange Board of India (SEBI).
This news comes ahead of its earnings for the March quarter, which are expected on Friday, April 19.
The Positive Effect On Jio Financial Services Shares
Apart from this news, after signing the agreement to make a 50:50 joint venture and with the official announcement, the shares of Jio Financial Services witnessed a spike of up to 5%. With the surge in price, Jio Financial Services reached at Rs 371.95 per share.