Jio Financial Services (JIOFIN) Best 1

Company vision is to digitally deliver range of financial products to promote financial well-being of the people of India.  Company will be a holding company and will operate its financial services business through its consumer facing subsidiaries namely Jio Finance Limited (“JFL”), Jio Insurance Broking Limited (“JIBL”), and Jio Payment Solutions Limited (“JPSL”) and joint venture namely Jio Payments Bank Limited (“JPBL”).

The Stock CMP as on 01-09-2023 Rs. 245.15 (NSE)

According to the latest reports coming from the financial services sector, Indian multinational conglomerate Reliance Industries has decided to enter into the financial services business with an entity named Jio Financial Services. Jio Financial Services which is currently part of Reliance industries would be demerged from the major entity.

Jio Financial Services (JIOFIN) would conduct finance businesses which would be beneficial for both consumers and merchants alike. With the setup of Jio Financial Services, Reliance Industries is planning to create a Fintech entity that would be accessible to all Indians.

Reliance Industries said in a statement that Jio Financial Services would be conducting the acquisition, and incubation of various businesses. The JFS entity would also be signing joint venture partnerships with related businesses.

The new partnerships and acquisitions are expected to help Jio Financial Services is expanding its financial services to insurance, payments, digital broking, and asset management.

The company said in a statement that the newly formed entity would be a transformational, customer-centric, and digital-first financial services enterprise offering simple, affordable, innovative, and intuitive financial services products to all Indians.

Reliance Industries also has the option to make use of a wide range of retail chains owned by the conglomerate to spread the message of Jio Financial Services (JIOFIN) and hence earn businesses through the consumers of other business arms. The company can also utilize the infrastructure and consumer base of other consumer businesses of Reliance Industries which are spread all over the country.

Apart from oil, energy, and retail business, Reliance Industries has a telecom business in name of Jio and continues to be one of the largest telecom service providers in the country. The financial service entity of Reliance can also make use of the telecom infrastructure to generate consumers and earn revenue.

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As part of the de-merger, shareholders of Reliance Industries received one JFS share for every Reliance share.

Even with the lower valuation, JFS is the third-largest non-banking financial company (NBFC) in India, behind Bajaj Finance (BJFN.NS) and Bajaj Finserv (BJFS.NS), which are valued at 4.15 trillion rupees and 2.32 trillion rupees respectively.

Non-Executive Chairman KV Kamath, a veteran banker and former chairman of ICICI Bank (ICBK.NS), said JFS intends to be a “full-service financial services player”.

He declined to elaborate on the company’s business plans or outlook, but JFS has already announced a joint venture with BlackRock Inc (BLK.N) to launch asset management services in India, with an initial investment of $150 million each.

“JFS (JIOFIN) will differ from most other fintechs in having access to huge amounts of data gathered from a non-financial relationship,” analysts at Macquarie Research said in a note earlier this year, referring to Reliance’s retail and telecom units.

“It can process and analyse those in real time to offer financial services like Alibaba, Amazon, Apple, Facebook, Google etc,” the research note added.

As part of the demerger, Reliance Industries folded into JFS the following units: Reliance Retail Finance, Reliance Payment Solutions Ltd, Jio Information Aggregator Services and Reliance Retail Insurance Broking. Jio Payments Bank will follow if the merger is approved by the central bank, the company said.

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