Jio Financial secures approval to raise foreign investment cap to 49%

In May 2024, the company sought shareholder approval to raise the foreign investment threshold to 49% as part of a strategic initiative to attract significant foreign capital

Jio Financial Services Ltd announced that it has received authorisation 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 set to enhance participation from Foreign Portfolio Investors (FPIs) and other global investors.

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. The move was part of a strategic initiative to draw foreign capital and enhance the company’s growth potential.

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.

In April, Jio Financial Services announced collaboration with BlackRock Inc to launch a wealth management and broking business. This venture is expected to reshape India’s asset management industry by providing digital-first investment solutions and broadening access for Indian investors. The partnership with BlackRock represents a significant step in Jio Financial’s strategy to expand its footprint in the wealth management sector.

Since going public in August last year with a market capitalisation 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.

Recently, Jio Financial announced the introduction of loans secured by mutual funds and digital insurance for autos and two-wheelers starting in July. The company has partnered with 31 insurance providers.

Additionally, the company has entered the ship leasing sector by deploying its first vessel through Reliance International Leasing IFSC Ltd (RILIL), in collaboration with Reliance Strategic Business Ventures Ltd, based in Gujarat’s GIFT City. The firm is also set to finance solar panels and IT equipment and has gained approval to expand its business correspondent network to 16,000 locations.