Jio Financial Services Q2: Mutual Funds Adjust Stakes Since Listing

As Jio Financial Services prepares to unveil its first quarterly results following its listing, a recent trend in mutual fund holdings has emerged. In the past month, mutual funds have reduced their stake in this non-banking financial company (NBFC) from 6.63 percent in August to 4.71 percent by the end of September, according to data from Prime Database.

Specifically, SBI Mutual Fund decreased its stake from 1.38 percent to 0.20 percent, Nippon India Mutual Fund lowered its stake from 0.53 percent to 0.33 percent, and HDFC Mutual Fund trimmed its holding from 0.33 percent to 0.19 percent.

Conversely, some mutual fund houses increased their holdings. Invesco and Mahindra Manulife Mutual Funds raised their stakes from 0.05 percent each in August to 0.10 percent. In the same period, Sandeep Tandon’s Quant Mutual Fund increased its stake from 1.07 percent to 1.10 percent.

It is worth noting that all mutual fund schemes holding shares of Reliance Industries received equal shares of Jio Financial Services as part of a scheme of arrangement. While passive funds tracking the Nifty 50 had to divest the stock due to their mandate, active funds could have sold anticipating a price correction due to passive selling, according to analysts.

However, many fund managers remain optimistic about the NBFC’s future. Both Quant Mutual Fund and Motilal Oswal Mutual Fund retain nearly 1 percent stakes in the company, as per Prime Database.

Mukesh Ambani, Chairman of Reliance Industries, has already announced Jio Financial Services’ foray into the insurance sector, where it will offer life, general, and health insurance products through a seamless digital interface, potentially partnering with global players.

Furthermore, Jio Financial Services has joined forces with the globally renowned Blackrock to enter the asset management industry. While its plans in the lending sector are yet to be disclosed, analysts speculate that Jio Financial Services will focus on merchant and customer lending due to its parent company’s extensive presence in kirana stores. As of June’s end, Reliance Industries boasted a total store count of 18,446, with 26.7 crore registered customers.

Reliance has infused Jio Financial Services with a net worth of Rs 1,20,000 crore, creating one of the world’s most highly capitalized financial service platforms from the outset. As of now, Jio Financial Services’ market capitalization stands at Rs 1.42 lakh crore, making it the third-largest NBFC after Bajaj Finance and its holding company, Bajaj Finserv.