Jio Financial to raise ₹15,825 cr from promoters via warrant issue

In a major boost to Jio Financial Services Ltd. (JFSL), the company’s board on Wednesday approved a ₹15,825 crore capital infusion from its promoter entities through a preferential issue of warrants.

 

The funds will be raised through the issuance of 50 crore warrants priced at ₹316.50 each, convertible into one equity share of face value of ₹10 at a premium of ₹306.50, the company said in a stock exchange filing. This will be one of the largest fund raises in the Indian financial services sector in recent times.

 

According to the company statement, the warrants will be allotted to two promoter group entities- Sikka Ports & Terminals Ltd. and Jamnagar Utilities & Power Pvt. Ltd – subject to shareholder and regulatory approvals. Upon full conversion, the promoter group’s combined stake will rise by 10.17 per cent. The Ambani family-owned promoter entities currently own 47 per cent stake in the company.

 

 

Jio Financial Services shares closed flat at ₹320 a share on Wednesday.

 

Among the promoter entities, Sikka Ports & Terminals will increase its holding from 1.08 per cent to 4.65 per cent, while Jamnagar Utilities & Power will move from 2.02 per cent to 5.52 per cent after the conversion, the statement said.

 

The warrants are convertible into fully paid-up shares within 18 months from the date of allotment. Unconverted warrants will lapse, and any amount paid on them will be forfeited, the statement added.

 

A source said Jio Financial, which was demerged from Reliance Industries in July 2023, is actively scaling its presence in lending, insurance, and asset management. The new round of funding from the promoters would be used mainly into entering the insurance sector.

 

On July 19, Jio Financial Services entered a 50:50 reinsurance joint venture agreement with Munich-based Allianz group through its wholly-owned subsidiary Allianz Europe B V. The company also signed a non-binding agreement with the Allianz group to form additional joint ventures in India’s life and general insurance sectors.

 

Several financial services companies are raising funds from investors and promoters in recent months. Earlier this month, Adar Poonawalla’s promoter entity approved a ₹1,500 crore infusion into Poonawalla Fincorp, boosting its net worth to ₹9,700 crore and supporting its retail expansion strategy. Tata Capital, the unlisted financial services arm of Tata Sons, is also planning a $2 billion initial public offering before September, to fund its growth in the fast-expanding Indian financial services market.