The BlackRock and Jio Financial Services mutual fund joint venture: All you need to know

The Securities and Exchange Board of India (SEBI) has provided in-principle approval for Jio Financial Services and BlackRock Financial Management Inc to act as co-sponsors for a new mutual fund.

This approval, communicated through a letter dated October 3, was disclosed in a recent stock exchange filing by the company.

In conjunction with this development, Jio Financial Services and BlackRock Advisors Singapore Pte. Ltd. have established a joint venture named "Jio BlackRock Investment Advisers Private Limited."


This entity will focus on investment advisory services, pending regulatory approvals.

The joint venture was officially incorporated on September 6, 2024, with the Certificate of Incorporation issued by the Ministry of Corporate Affairs the following day.

According to the filing, Jio Financial will make an initial investment of ₹3 crore by subscribing to 30 lakh equity shares with a face value of ₹10 each.

Additionally, Jio Financial Services has secured approval from the Department of Economic Affairs to raise its foreign investment cap to 49% of its paid-up equity share capital on a fully diluted basis.

Currently, foreign investors hold a 17.55% stake in the company, which is part of the broader public float.

The establishment of Jio Financial Services is expected to significantly influence the fintech landscape in India, targeting the vast potential for retail lending and payment services.

These initiatives align closely with Reliance’s existing digital and retail operations, offering substantial growth opportunities.

Jio Financial Services, a non-banking entity of Reliance Industries Ltd., was demerged from its parent company in July 2023. Since then, it has diversified into various sectors, including secured and unsecured lending, digital equipment leasing, supply chain financing, insurance broking, and payment solutions.

New venture in sight?

According to a report by Bloomberg, Jio Financial Services and BlackRock Inc are now in talks for their third collaboration, though no confirmation on the matter has been made public.

India has emerged as a vibrant hub for private credit in Asia. Notable global firms such as Apollo Global Management, Cerberus Capital Management LP, and Varde Partners have increased their activities in the country, attracted by the growing funding requirements of local businesses.

The report suggests that this time, the two firms will join hands to enter the private credits market in India, with a prime focus on funding startups.

A recent report by EY indicated that private credit investments in India surged to a record $6 billion in the first half of 2024.

The global private credit market, valued at $1.7 trillion, has expanded significantly since the global financial crisis, prompting lenders like Blackstone Inc. to seek growth opportunities in emerging markets like India.

“There are openings in India to lend to large enterprises with multiple subsidiaries as well as young entrepreneurs funding start-ups,” Celia Yan, BlackRock’s head of APAC private credit, was quoted as saying by Bloomberg.

Jio Financial, led by veteran banker K.V. Kamath, currently operates a shadow banking platform that offers services such as home mortgages and loans against mutual fund investments.

BlackRock appointed Maheshwar Nataraj to spearhead its private credit business in India, earlier this year.