Jio Financial Services Ltd has recently received authorization from the Department of Economic Affairs within the Ministry of Finance to raise its foreign investment cap to 49 per cent of its total equity on a fully diluted basis. This adjustment is aimed at increasing participation from Foreign Portfolio Investors (FPIs) and other global investors, signaling a strategic move to attract foreign capital and enhance the company’s growth potential.
Currently, foreign investors own 17.55 per cent of the company’s shares out of the nearly 53 per cent public float. The non-banking arm of Reliance Industries Ltd, Jio Financial Services, was demerged from its parent company in July 2023. In May 2024, the company sought shareholder approval to allow foreign investments up to the 49 per cent threshold, paving the way for increased foreign investment in the company.
For the quarter ending March 2024, Jio Financial Services reported a 6 per cent increase in consolidated net profit, reaching Rs 311 crore, up from Rs 294 crore in the previous quarter. However, consolidated revenue from operations remained relatively stable at Rs 418 crore, compared to Rs 414 crore in the previous quarter, indicating steady performance in the company’s financials.
In April, Jio Financial Services announced a collaboration with BlackRock Inc to launch a wealth management and broking business, aiming to provide digital-first investment solutions and broaden access for Indian investors. This partnership with BlackRock represents a significant step in Jio Financial’s strategy to expand its footprint in the wealth management sector and offer innovative financial services to its customers.
Since going public in August last year with a market capitalization exceeding Rs 1.5 trillion, Jio Financial Services Ltd’s shares closed at Rs 327.05 on Friday, marking a 0.77 per cent decrease. Despite the slight dip in share price, the company’s strategic initiatives and partnerships indicate a strong growth trajectory in the financial services sector.
Recently, Jio Financial announced the introduction of loans secured by mutual funds and digital insurance for autos and two-wheelers starting in July, in partnership with 31 insurance providers. Additionally, the company has ventured into the ship leasing sector through Reliance International Leasing IFSC Ltd (RILIL) and is set to finance solar panels and IT equipment. Jio Financial has also gained approval to expand its business correspondent network to 16,000 locations, further expanding its reach and services to customers.
In conclusion, Jio Financial Services Ltd’s decision to raise its foreign investment cap and its strategic partnerships reflect a commitment to growth and innovation in the financial services sector. With a focus on expanding its offerings and reaching a wider customer base, the company is poised for continued success in the evolving financial landscape.