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Jio Financial Service, part of billionaire Mukesh Ambani-led Reliance Group, said the JV aims to tap into India’s increasingly lucrative wealth business and will include the incorporation of a wealth management firm and, subsequently, a brokerage company.
India’s wealth managers look after $1-1.2 trillion of financial assets owned by high net-worth individuals of the South Asian country, as per a recent Jefferies report.
By setting up the brokerage firm, Jio Financial and BlackRock also hope to cash in on the growing tribe of retail investors in India who have been betting on the country’s benchmark stock indices, which are hovering at record-high levels.
Data from the country’s market regulator, the Securities and Exchange Board of India (SEBI), says trading accounts in India have risen by over 30% to roughly 148 million as of February from the same time last year.
Last June, the two companies had formed a 50:50 joint venture to launch asset management services in India and had pledged an initial investment of $150 million each, with hopes to democratise access to investment solutions for investors in the country.
The firms had applied for an in-principle approval to set up the asset management business with SEBI in Oct, but are still awaiting approval.
BlackRock shares rose 1.7% in early trade on the New York Stock Exchange after Monday’s announcement.
Last year, Jio Financial Services was demerged from Reliance Industries, with the markets ascribing a valuation of nearly $20 billion to the venture, which is still building out its business.
