Jio Financial Services Gets Green Light to Boost Foreign Investment to 49% Equity Share Limit
Jio Financial Services Ltd has received approval from the Department of Economic Affairs to increase the limit for foreign investment to 49% of its paid-up equity share capital on a fully diluted basis. This includes investments from Foreign Portfolio Investors (FPIs).
Current Foreign Investment Holding
Foreign investors currently hold 17.55% of the company’s shares. This is part of the nearly 53% of shares available to the public, according to data from the stock exchange.
Background on Jio Financial
Jio Financial Services, a non-banking financial company under Reliance Industries Ltd, was separated from its parent company in July 2023.
First Quarter Financial Performance
In the first quarter of this year, Jio Financial Services reported a 6% drop in consolidated net profit, which fell to ₹313 crore compared to ₹332 crore in the same quarter last year. This decline was largely due to a decrease in interest income and a rise in operating expenses. Interest income dropped by 20% to ₹162 crore, down from ₹202 crore a year ago, while expenses increased from ₹54 crore to ₹79 crore. A significant part of this increase in expenses was due to staff costs, which more than tripled to ₹39 crore in June 2024.
New Products and Services
In July, Jio Financial Services launched several new products, including loans against mutual funds and digital insurance for cars and two-wheelers. The company has partnered with 31 insurance companies to offer these services.
Expansion into New Businesses
Jio Financial has also entered the ship leasing business, leasing its first ship under Reliance International Leasing IFSC Ltd (RILIL), a joint venture with Reliance Strategic Business Ventures Ltd, based in GIFT City, Gujarat. Additionally, the company plans to finance solar panels and IT equipment and has received approval to expand its network of business correspondents (BCs) to 16,000 outlets.
Joint Venture with BlackRock
The company’s asset management joint venture with BlackRock is progressing well, with infrastructure and technology platforms in advanced stages of development.
