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Jio Financial Services, in partnership with BlackRock, is poised to launch a suite of financial services, spanning wealth management and brokerage. This collaboration signifies a strategic move by Jio to diversify its offerings and enter the financial sector, leveraging BlackRock's expertise to cater to evolving consumer needs and preferences.
In July 2023, Jio Financial Services and BlackRock formed a partnership to enter India's mutual fund market, which is valued at over Rs 50 trillion.
Jio Financial Services, helmed by Mukesh Ambani, is set to diversify into stockbroking and wealth management with a 50-50 joint venture (JV) alongside US-based BlackRock. This move comes as part of a broader partnership with BlackRock, which also involves establishing an asset management business in India. The new ventures were formalized through another joint venture agreement signed on Monday.
The announcement arrives amid the pending regulatory approval for their previous joint venture focused on mutual funds (MF). This venture submitted its license application for the MF business to the Securities and Exchange Board of India (Sebi) back in October 2023.
Jio Financial Services Ltd
In July 2023, the two entities initiated a collaboration to tap into India's mutual fund market, valued at over Rs 50 trillion. Committing $150 million each, both firms ventured into the asset management sector in India. Now, according to an exchange filing by Jio, BlackRock, Inc., and BlackRock Advisors Singapore Pte have formalized an agreement to establish a 50:50 joint venture. This partnership aims to engage in wealth management activities, including setting up a wealth management company and subsequently establishing a brokerage firm in India. To proceed with these new ventures, separate licenses from Sebi will be required.
Jio Financial Services, recently spun off from Mukesh Ambani's Reliance Industries, is making strides in the financial services domain. According to Jefferies' report, institutional platforms currently oversee more than half of the estimated $1-1.2 trillion financial assets held by high-net-worth individuals in India. While around a third of these assets are managed by banks, Indian wealth managers handle approximately 12-14 percent. With this new joint venture, Jio Financial Services is set to enter into competition with bank-led wealth management firms and other players in the market such as BNP Paribas Wealth Management, 360 One, Nuvama, and Avendus.
In the stockbroking business, the JV may face competition from discount brokers, which account for nearly two-thirds of active clients.
Source: business standard
