Jio Financial's application for mutual fund licence under process: Sebi

Update by regulator puts to rest speculations that Jio is looking to enter MF space through acquisition

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Jio Financial Services is among applicants under consideration for a mutual fund (MF) licence, shows an updated list of MF applicants put out by the Securities and Exchange Board of India (Sebi).

Jio Financial, which has a joint venture (JV) with Blackrock Financial Management for asset management, filed the application for MF licence on October 19, 2023. The applicants list is updated by Sebi at the end of every quarter.

The update from Sebi puts to rest speculations that Jio Financial was considering an acquisition to enter the Rs 50-trillion MF industry.

Jio Financial had announced the JV and the plan to enter the asset management space in July. The two partners plan to invest $150 million each in the JV.

Going by the time taken by Sebi to grant MF licence, in the recent past, the Jio Financial MF may take at least a year to get operational. The licence is granted in two steps. Initially, applicants get an in-principle approval, allowing them to start setting up the AMC. The final approval comes after some months.

Lately, Sebi has quickened licence approvals. Since March 2023, the markets regulator has given final approvals to four asset management companies (AMCs), namely Bajaj Finserv, Old Bridge Capital Management, Helios Capital and Zerodha. The companies had already obtained in-principle approvals before the year started.

The queue for licence has also shortened due to changes in net-worth criteria. The minimum net-worth criteria for applicants not meeting the profitability requirements has been raised to Rs 150 crore from Rs 100 crore previously.

Apart from Jio Financial, Abira Securities and Angel One were in contention for MF licence, shows the latest update from Sebi. Angel One has already received partial approval.