Explained: Why the Ambani family is investing in Jio Financial, not RIL

Ambani family's ₹10,000 crore capital infusion into Jio Financial bypasses RIL. Here's what it signals for strategy, control, and the future of the group's NBFC play

The Mukesh Ambani-led family is set to directly invest ₹10,000 crore in Jio Financial Services Ltd, as the company prepares for a major capital raise. As earlier reported by Business Standard, this is not Reliance money — it’s promoter-level capital being funnelled into a financial services venture that, while born out of RIL, now stands as a separate entity.

 

Promoter vs RIL: Who owns what

To understand this investment, it’s important to separate Reliance Industries Ltd (RIL) from the Ambani family, despite the overlap in ownership.

 

RIL is a publicly listed conglomerate with diversified holdings across energy, telecom, and retail. It is majority-controlled by the Ambani family through a complex web of promoter holding companies such as Devarshi Commercials LLP, Tattvam Enterprises LLP, and others. As of March 2024, promoters held approximately 50.39 per cent of RIL.

 

 

Jio Financial Services Ltd, which operates as a Non-Banking Financial Company (NBFC), was officially demerged from Reliance Industries and listed on stock exchanges in August 2023. The shareholders are receiving shares in Jio Financial in a 1:1 ratio. Since its listing, Jio Financial has focused on expanding into consumer lending, insurance, and fintech partnerships.

 

Jio Financial operates independently as a core investment company (CIC) registered with the Reserve Bank of India (RBI), and Reliance has no direct operational involvement. Currently, the Ambani family owns about 47.12 per cent of Jio Financial Services.

 

Why is the money coming from the Ambani family?

One of the key reasons the funding may be coming directly from the Ambani family — and not Reliance—is to insulate RIL from potential balance sheet risks associated with financial services and lending.

 

Independent market analyst Ambareesh Baliga notes that this structure gives Jio Financial more flexibility and allows it to function outside RIL’s more cautious, diversified capital allocation framework. “RIL already has a decent number of other projects to invest in,” he told Business Standard, suggesting that separating financial ventures from core operations allows each to grow without overextending the parent balance sheet.

 

Financial sector regulators, including the RBI, maintain stricter oversight of large NBFCs, especially when they are tied to major industrial conglomerates. Keeping the investment at the promoter level ensures Jio Financial Services can operate with greater strategic autonomy, including flexibility in raising additional capital, entering new joint ventures, or even listing its subsidiaries.

 

For Baliga, the move also reflects strategic intent. “It has come to a point where people see Jio Financial as a potential disruptor in the market,” he said, pointing out that a company like this needs two things: deep pockets and strong promoter reach, both of which the Ambani family has. “The promoter family's wealth has to be invested somewhere — and when you have a company in your own backyard, why not?”

 

It also offers significant upside. If Jio Financial Services grows successfully through digital lending, insurance, or wealth management, the Ambani family will gain value directly, rather than through Reliance Industries shareholders.

 

Ambani leveraging 'backyard advantage' with Jio Financial

That “backyard advantage” is already visible. Baliga credits the Ambani family’s network and influence for bringing in global partners like BlackRock, something he believes would be challenging for many others to replicate. “Who else could have brought in BlackRock?” he asked — emphasising that strong capital alone isn’t enough; access and credibility matter just as much in global financial circles.

 

If Jio Financial Services grows successfully through digital lending, insurance, or wealth management, the Ambani family will gain value directly, rather than through Reliance Industries shareholders — a scenario Baliga compares to moves made by other industrialist families. He cites the example of the Poonawalla family, which acquired and backed Magma Fincorp (now Poonawalla Fincorp) as a strategic financial play, and says the Ambanis are following a similar high-capital, high-control model.

 

He also draws parallels with Bajaj Finance’s evolution — a company that has built an empire by aggressively expanding into lending, merchant services, and insurance. “Financial services has many verticals,” Baliga said. “This is one segment that truly requires deep pockets.”

 

The fresh infusion could also push the Ambani family’s stake in Jio Financial Services to over 51 per cent, giving them majority control. The exact details of the deal will be decided by the RIL board and are subject to regulatory approval.

 

Promoter-led capital infusions

Promoter-led capital infusions are becoming more common as competition intensifies. Earlier this month, Adar Poonawalla’s group infused ₹1,500 crore into Poonawalla Fincorp to support its retail expansion. Tata Capital is also reportedly preparing for a $2 billion IPO before September to raise funds for its growing financial services business.

 

Jio Financial Services outlook

Jio Financial Services’ board is expected to meet on Wednesday to consider various fundraising options, including a rights issue, preferential allotment, qualified institutional placement (QIP), or a mix of these. The new shares are expected to be priced between ₹320 and ₹325 each, close to Tuesday’s closing price of ₹321 per share, which values Jio Financial Services at ₹2.03 trillion. 

Jio Financial Services is structured into multiple business units, including Jio Credit, Jio Insurance Broking, Jio Payment Solutions, Jio Leasing Services, Jio Finance Platform and Services, and Jio Payments Bank. These arms collectively support its goal of offering Indians a fully integrated financial platform—to borrow, invest, save, and transact—all within a digital ecosystem.

 

The financial arm is rapidly scaling. Jio Financial Services recently entered into a 50:50 reinsurance joint venture with Germany’s Allianz Group through its wholly owned subsidiary, Allianz Europe B.V. The two groups have also signed a non-binding agreement to explore additional collaborations in India’s life and general insurance sectors. Separately, Jio BlackRock, a joint venture between Jio Financial Services and US-based asset manager BlackRock, raised ₹17,500 crore in its first fund offering earlier this month.