Jio Financial-BlackRock JV to launch wealth management, broking business
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Jio Financial Services, led by Mukesh Ambani, plans to venture into the stockbroking and wealth management business through an equal joint venture (JV) with US-based BlackRock. The world’s largest asset manager is also Jio’s partner in establishing an asset management business in India.
The company entered into another JV with BlackRock on Monday to incorporate the new businesses.
The announcement comes at a time when their earlier JV for a mutual fund (MF) awaits regulatory approval for a licence. The JV submitted its application for the MF business to the Securities and Exchange Board of India (Sebi) in October 2023.
The two firms had previously entered into a tie-up in July 2023 to enter the over Rs 50 trillion MF market in India. Both companies had announced an investment of $150 million each for the asset management business in India.
“BlackRock, Inc., and BlackRock Advisors Singapore Pte have signed an agreement with the company to form a 50:50 JV for the purpose of undertaking wealth business, including the incorporation of a wealth management company and subsequent incorporation of a brokerage company in India,” said Jio in an exchange filing.
The firm will need to apply for separate licences from Sebi for the launch of wealth management and broking businesses.
Jio Financial Services is the newly demerged financial services arm of billionaire Mukesh Ambani’s Reliance Industries.
According to a report by Jefferies, institutional platforms manage over 50 per cent of the $1-1.2 trillion of financial assets owned by India’s high-networth individuals. While a third of it is managed by banks, 12-14 per cent of the assets are managed by Indian wealth managers.
The newly formed JV may compete with bank-led wealth management firms and firms like BNP Paribas Wealth Management, 360 One, Nuvama, and Avendus, among others.
In the stockbroking business, the JV may face competition from discount brokers, which account for nearly two-thirds of active clients.
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