Jio Financial Services Ltd Management Discussions

^{JFSL Annual Report FY25}

^{Company Overview}

^{Jio Financial Services Limited (JFSL), formerly known as Reliance Strategic Investments Limited, is a Core Investment Company - Non-Deposit Taking - Systemically Important (CIC-ND-SI), registered with the Reserve Bank of India (RBI) under Corporate Identity No. L65990MH1999PLC120918. Incorporated on July 22, 1999, in Mumbai, JFSL serves as the holding company for the Groups financial services businesses.}

^{Operating through its subsidiaries, joint ventures and Associates, JFSL addresses the four core financial needs of customers: The need to borrow, invest, transact and protect.}

^{The Companys subsidiaries include:}

^{• Jio Credit Limited (formerly Jio Finance Limited)}

^{• Jio Leasing Services Limited (formerly Jio Information Aggregator Services Limited)}

^{• Jio Insurance Broking Limited (formerly Reliance Retail Insurance Broking Limited)}

^{• Jio Payment Solutions Limited (formerly Reliance Payment Solutions Limited)}

^{• Jio Finance Platform and Service Limited Its joint ventures comprise:}

^{• Jio Payments Bank Limited (a joint venture with State Bank of India)}

^{• Reliance International Leasing IFSC Limited (a joint venture between Jio Leasing Services Limited and Reliance Strategic Business Ventures Limited)}

^{• Jio BlackRock Asset Management Private Limited and Jio BlackRock Trustee Private Limited (joint ventures with BlackRock Financial Management Inc. for the asset management business)}

^{• JioBlackRock Investment Advisers Private Limited (a joint venture with BlackRock Advisors Singapore Pte. Ltd. for wealth management)}

^{• Jio BlackRock Broking Private Limited (a wholly-owned subsidiary of JioBlackRock Investment Advisers Private Limited for broking services)}

^{Macroeconomic Overview}

^{The global economy demonstrated resilience through FY25, despite moderating activity, policy uncertainty and geopolitical tensions. The International Monetary Fund (IMF) projected global GDP growth at 3.2% for both 2024 and 2025, indicating steady but moderate expansion.}

^{India remained the worlds fastest-growing major economy. The Reserve Bank of India (RBI) projected real GDP growth at 6.5% for FY26, mirroring FY25 levels, supported by robust investments, public consumption and increasing formalisation. The IMF expects India to become a $5 trillion economy by FY28 and reach $6.3 trillion by FY30.}

^{Inflation dynamics improved during the year. Headline Consumer Price Index (CPI) inflation eased to 3.3% in March 2025, driven by softening food and beverage prices. For FY25, retail inflation stood at 4.6% vs 5.4% in FY24 and is projected to be 4% in FY26.}

^{Reflecting a comfortable inflation outlook, the MPC initiated its first repo rate cut since 2020, reducing the rate by 25 basis points to 6.25% in February 2025, followed by a similar cut to 6% in April 2025.}

^{Indias financial stability indicators remained healthy. According to the RBIs December 2024 Financial Stability Report, household debt rose to 42.9% of GDP as of June 2024, a modest figure relative to emerging market peers. Growth was attributed primarily to a wider borrower base, with asset-backed loans among super-prime borrowers maintaining overall credit quality and systemic resilience.}

^{Industry Overview}

^{Technology continues to be the life-force reshaping the Indian financial services landscape. The rise of fintech ecosystems, the proliferation of digital lending platforms and the integration of advanced technologies — including Artificial Intelligence (AI), Machine Learning (ML) and data analytics — have fundamentally transformed the manner in which financial services are delivered, accessed and consumed.}

^{These innovations have driven notable improvements in operational efficiency, reduced customer acquisition, servicing costs and meaningfully broadened access to financial products, particularly for underserved segments. Government-led initiatives such as the Unified Logistics Interface Platform (ULIP) and the Open Network for Digital Commerce (ONDC) have further accelerated this digital transformation by strengthening the underlying infrastructure and enabling greater interoperability across platforms.}

^{As the regulatory environment continues to evolve to balance innovation with consumer protection, financial institutions are deepening their investment in digital capabilities, including cybersecurity measures. Non-Banking Financial Companies (NBFCs) — traditionally known for their agility — are at the forefront of leveraging technology to achieve faster turnaround times and enhanced customer experiences and journeys. Banks are similarly intensifying their digital transformation efforts, building steady momentum in digitising their product and service offerings. The ongoing convergence of technology and financial services is expected to remain a key catalyst for sectoral growth, fostering wider financial services accessibility, product innovation and operational resilience.}

^{Non-Banking Financial Companies (NBFCs)}

^{NBFCs continue to play a vital role in driving financial inclusion and supporting economic growth by offering tailored financial products to underserved customer segments. New-age NBFCs have sustained competitiveness through lean operations, rapid digital adoption, the use of artificial intelligence (AI) and data analytics to improve efficiency and risk management.}

^{During the first half of FY25, NBFC sector credit growth moderated to 16% year-on-year, compared to 18.5% in FY24, following the Reserve Bank of Indias (RBI) decision to raise risk weights on certain categories of unsecured consumer credit.}

^{A key emerging risk for the sector is the increasing incidence of borrowers availing multiple personal loans despite existing debt obligations, raising concerns about delinquencies in unsecured lending portfolios. Initially, the RBI tightened funding access for NBFCs by raising bank exposure risk weights. However, recognising the need to balance credit growth, it reversed this decision effective April 1, 2025, improving NBFCs access to funding and potentially lowering borrowing costs.}

^{Within the lending landscape, housing finance continues to be a major growth driver. As of September 30, 2024, outstanding individual housing loans grew 14% year-on-year to Rs33.5 lakh crore. CareEdge Ratings projects the housing loan market to expand to ~Rs81 lakh crore over the next five years, underscoring robust longterm demand.}

^{Payment Solutions and Payment Banks}

^{Indias payments industry continues to evolve rapidly in step with the growing economy, driven by advancements in digital payment solutions and the expanding role of payments banks. The countrys digital payments ecosystem has experienced robust growth, fuelled by the widespread adoption of the Unified Payments Interface (UPI) and a broadening suite of digital payment alternatives.}

^{During FY25, UPI volumes exceeded 186 billion transactions, with the total transaction value surpassing Rs261 lakh crore. UPI now contributes ~80% of all retail payments. According to PwCs The Indian Payments Handbook - 2024-2029, the value of digital payment transactions is projected to grow to Rs577 lakh crore by FY29, with UPI alone expected to account for Rs483 lakh crore. Daily UPI transactions are forecasted to reach 1.4 billion by FY29, highlighting the deepening penetration and adoption of digital payments across the country.}

^{Payments banks continue to support financial inclusion, a focus reinforced by government initiatives such as the Pradhan Mantri Jan Dhan Yojana (PMJDY) and the Digital India programme. PMJDY has expanded the formal banking customer base by furthering financial inclusion, while Digital India has strengthened the digital infrastructure and promoted digital literacy nationwide. These initiatives, in turn, enable payment banks to better serve previously underserved and unbanked populations, driving transaction volumes, customer acquisition and sectoral expansion.}

^{Insurance Broking}

^{According to the Economic Survey 2024-25, Indias insurance industry grew 7.7% year-on-year to Rs11.2 lakh crore in FY24, with life insurance comprising nearly 75% of the total market. However, insurance penetration declined to 3.7% in FY24 from 4% in FY23, significantly below the global average of 7%, highlighting considerable growth potential.}

^{Government initiatives, including the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Fasal Bima Yojana (PMFBY) and Pradhan Mantri Jan Arogya Yojana (PMJAY), are widening insurance access. Regulatory efforts such as the Insurance Regulatory and Development Authority of Indias (IRDAI) Insurance for All vision, reforms in policy and claims processing and the recent increase in the Foreign Direct Investment (FDI) cap to 100% are expected to strengthen investor confidence and capital inflows. The upcoming unified digital platform Bima Sugam is also set to streamline digital access to insurance products.}

^{Insurance broking is expected to grow steadily, driven by increasing public awareness, an evolving regulatory environment and the accelerating adoption of digital technologies across the financial ecosystem.}

^{Asset Management, Wealth Management and Broking}

^{Retail investor participation in Indias capital markets has witnessed a notable surge post-pandemic, driven by the rise of both direct equity trading and Mutual Fund investments. According to the Economic Survey 2024-25, India had 11.5 crore unique demat account holders and 5.6 crore unique Mutual Fund investors as of December 2024, reflecting deepening financial market penetration. This growth is underpinned by an expanding economy, rising disposable incomes and growing financial literacy, particularly among affluent and high-net-worth individuals seeking professional wealth management services.}

^{The Mutual Fund industry continues to expand at a healthy pace. As of March 31, 2025, Assets Under Management (AUM) registered strong year-on-year growth of 23% to Rs65.7 lakh crore, while Systematic Investment Plan (SIP) inflows during FY25 rose 45% year-on-year to Rs2.9 lakh crore from Rs2.0 lakh crore in the previous year. Under the Viksit Bharat 2047 vision, the Association of Mutual Funds in India (AMFI) is targeting a sharp increase in retail mutual fund penetration—from 3.6% in 2025 to ~15% by 2047.}

^{Technology is playing a pivotal role in reshaping wealth management and broking. The adoption of robo-advisory platforms, algorithm- driven investment solutions and automated portfolio management tools is transforming client engagement and service delivery. These digital platforms offer cost-effective, transparent investment options and cater to the evolving preferences of a new generation of investors. According to Deloitte Touche Tohmatsu India LLPs report titled Financial Wealth Management Services in India, the wealth management industry in India presents a $1.6 trillion opportunity between FY24 and FY29, underscoring the sectors growth potential.}

^{Business Update}

^{Jio Financial Services Limited (JFSL) continues to advance its mission of democratising access to financial services through a digital-first approach. At the heart of this strategy is our JioFinance app, which serves as the central platform for JFSLs retail offerings. In September 2024, the JioFinance app was integrated into the MyJio platform, leveraging its expansive customer base to enhance accessibility. Average monthly active users across all digital properties of JFSL crossed 8 million in March 2025.}

^{JFSL addresses the four core financial needs of customers through its customer-facing subsidiaries:}

^{1. Need to Borrow:}

^{• Jio Credit Limited offers secured lending products for retail customers, including home loans, loans against property and loans against securities. It also provides supply chain financing, vendor financing and enterprise leasing solutions for devices and cars to corporate customers. The Company reported a total AUM of Rs10,053 crore as of FY25.}

^{2. Need to Transact:}

^{• Jio Payment Solutions Limited provides an integrated payment infrastructure to enterprises to accept and optimise collection through online, offline/ in-store and remote channels.}

^{• Jio Payments Bank Limited offers digital banking solutions to consumers, including CASA (current account, savings account) services, debit cards and Aadhaar Enabled Payment System (AePS) facilities. As of FY25, the bank served 2.31 million CASA customers, maintained a deposit base of Rs295 crore (including wallets) and operated through a network of over 14,000 business correspondents.}

^{3. Need to Protect:}

^{• Jio Insurance Broking Limited distributes life, health and general insurance products through tie-ups with 34 insurance partners, via its direct-to-customer, embedded and institutional sales channels.}

^{4. Need to Invest:}

^{• Jio BlackRock Asset Management Private Limited will offer mutual fund products to investors.}

^{• JioBlackRock Investment Advisers Private Limited will provide wealth management and investment advisory services.}

^{• Jio BlackRock Broking Private Limited will offer digital-first brokerage services.}

^{Opportunities and Threats}

^{Indias financial services sector remains a key engine of economic growth, supported by favourable demographics, rising disposable incomes and a growing culture of savings and investment. Rapid adoption of digital channels — including mobile banking, wallets and UPI — has widened financial inclusion, while government initiatives promoting a cashless economy and fintech innovation have accelerated this transformation.}

^{As penetration deepens across Tier II and Tier III cities, a significant untapped market continues to emerge, offering compelling growth opportunities for financial service providers. New-age players, including NBFCs, payments banks and insurance brokers, are well-positioned to meet evolving customer needs through agile, technology-led models. Rising smartphone usage and digital infrastructure improvements are expected to sustain momentum across the sector.}

^{At the same time, the increasing digitisation of financial services has heightened cybersecurity risks, necessitating stronger frameworks to protect customer data and safeguard trust. Regulatory scrutiny around consumer protection, systemic stability and risk management is likely to increase, introducing new compliance demands. In addition, global macroeconomic challenges, including inflationary pressures, monetary policy shifts and geopolitical uncertainties, could impact credit demand and investment flows.}

^{Unlocking the full potential of the sector will require continued investment in digital infrastructure, greater financial literacy and resilient, transparent regulatory practices. Strategic collaboration between policymakers, financial institutions and technology providers will also be essential to drive sustainable innovation and maintain sector resilience.}

^{Segment- and Product-wise Updates}

^{JFSL is primarily engaged in investing and financing activities in India. In accordance with Ind AS 108 "Operating Segments, the Company operates a single reportable segment and does not have any separate business or g eographical seg ments requiring disclosure.}

^Outlook

^{JFSL was established to capitalise on Indias vast financial services opportunities by innovating and democratising access to new-age financial solutions. Over the past year, the Company has focused on building core infrastructure and execution capabilities across key business verticals. In FY26, the focus will shift towards scaling operations, enhancing efficiency and driving sustainable, profitable growth.}

^{A major priority will be establishing a strong presence across asset management, wealth management and broking through the joint venture with BlackRock. JFSL is also expanding its data analytics capabilities and leveraging access to a large and diverse customer base to deliver hyper-personalised financial solutions. By integrating advanced technologies, including artificial intelligence and predictive analytics, the Company aims to offer the right products to the right customers through the right channels at the right time, optimising engagement and delivering long-term value.}

^{As a digital-first institution, JFSL is uniquely positioned to harness emerging technologies to enhance operational capabilities and customer experience. The Company remains committed to bridging the gap between aspiration and access, ensuring that every Indian is empowered with the financial tools needed to thrive in an increasingly digital economy.}

^{Risk and Concerns}

^{JFSLs core business operations are concentrated in India, making its performance sensitive to the countrys prevailing macroeconomic conditions. Political, economic and legal factors, as well as fluctuations in foreign currency exchange rates, could materially impact the Companys operating environment. Given JFSLs dependence on interest income and net interest margin, movements in interest rates — influenced by the Reserve Bank of Indias monetary policies, inflationary trends and domestic and international developments — remain a key area of sensitivity. The ability to pass on increased interest costs to borrowers depends on their willingness and the intensity of market competition.}

^{JFSL may obtain funding or lend through both fixed and floating interest rates. The Companys asset-liability management strategy aims to prevent excessive imbalances in its financial position.}

^{The Companys business and financial results are also exposed to regulatory risks. Adverse changes to existing laws, the introduction of new regulations or shifts in regulatory interpretations could impose additional operational conditions, licensing requirements or approval obligations. Such changes may affect JFSLs cost structures and operating flexibility.}

^{Further, any downgrade in Indias sovereign credit ratings by domestic or international rating agencies could impact JFSLs access to financing or alter the commercial terms of such funding. This, in turn, could affect the Companys growth plans, financial performance and overall shareholder value.}

^{Internal Control Systems and their Adequacy}

^{The Company, as a registered Core Investment Company (CIC) under RBIs Master Direction for CICs, has established a comprehensive and group-wide internal control and financial governance framework. This framework is aligned with the requirements of the Companies Act, 2013, RBI regulations and the components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India ("ICAI"), and other applicable laws to ensure robust risk management, asset protection, financial accuracy, and regulatory compliance across the Company along with its subsidiaries, joint ventures and Associates.}

^{Internal financial controls have been embedded into key business processes across group—regulated and unregulated—ensuring that all transactions are appropriately authorized, recorded, and reported. The Company adheres to applicable Indian Accounting Standards (Ind AS) for maintaining books of account and financial reporting.}

^{The internal control environment is continuously monitored through:}

^{• Management oversight and periodic self-assessments,}

^{• Risk-based internal audits conducted by independent audit teams in line with regulatory expectations for the Company.}

^{• Function-level control monitoring within each subsidiary, and}

^{• Ongoing compliance tracking across operational, financial, and regulatory domains.}

^{The Audit Committee of the Company, which has oversight over group-level internal controls, meets periodically to review:}

^{• The adequacy and effectiveness of internal financial controls across all entities,}

^{• Status of compliance with internal policies, standard operating procedures, and applicable regulatory guidelines,}

^{• Implementation of audit findings and corrective actions across the CIC, its subsidiaries, Joint Ventures and Associates}

^{The Company maintains a unified risk and control approach to ensure consistent governance across the group and remains committed to strengthening its control systems in alignment with evolving regulatory guidelines and supervisory expectations.}

^{Human Capital}

^{In a rapidly evolving business landscape defined by technological advancement and changing talent expectations, JFSL is building a future-ready workforce aligned with its vision to create Indias premier financial services institution. The Companys people strategy is anchored on the belief that human capital is its most valuable asset, with initiatives designed to foster a sustainable, agile and innovation-driven organisation.}

^{Three strategic pillars support this commitment:}

^{• Capability Development: Continuous investment in employee growth through rigorous assessments and focused upskilling, enabling the workforce to navigate the complexities of a dynamic financial services environment.}

^{• Culture of Innovation and Inclusion: A workplace culture that encourages innovation, psychological safety and inclusivity, positioning JFSL as an employer of choice and ensuring employee well-being and engagement.}

^{• Strategic Collaboration: Cross-functional partnerships that enhance internal synergies and deliver seamless, customercentric financial solutions across access, affordability and prosperity.}

^{As of FY25, JFSLs team comprises over 1,000 professionals, drawn from diverse backgrounds across gender, experience, industries and geographies. These principles drive JFSLs efforts to build a truly talent-intensive organisation that supports sustainable growth and long-term stakeholder value creation.}

^{Enterprise Risk Management}

^{JFSL operates within a dynamic risk landscape across its subsidiaries, managing exposures that include credit, market, liquidity, operational, strategic, fraud, model and digital risks. A comprehensive Enterprise Risk Management (ERM) framework underpins the Companys approach, ensuring that risk identification, assessment, mitigation and monitoring are embedded into all strategic and operational activities. Risks are identified through proactive self-evaluation exercises and data analytics, followed by rigorous quantitative and qualitative assessments. Mitigation strategies, including diversification, insurance and the institution of robust internal controls, are implemented to limit impact.}

^{The ERM framework is aligned with JFSLs risk appetite and strategic objectives and is governed through a clear, multi-layered structure that defines stakeholder roles and responsibilities. This ensures risk considerations are fully integrated into decisionmaking across investment, policy and operational domains.}

^{Automation tools enhance the effectiveness and accuracy of risk monitoring, while the Companys disaster recovery and business continuity plans, built on detailed impact analyses, safeguard critical operations in the event of unforeseen disruptions. Through continuous monitoring, reporting and adaptation, the ERM framework ensures that risk levels are maintained within acceptable thresholds, supporting JFSLs long-term resilience and stability.}

^{Financial Results}

^{The Companys financial performance (standalone and consolidated) for the year ended March 31, 2025 is summarised below:}

Particulars	Standalone		Consolidated
	FY25	FY24	FY25	FY24
Interest Income	117.13	381.61	852.53	937.74
Dividend	235.03	-	240.94	216.85
Fees, commission and other services	6.40	1.69	155.17	151.66
Net gain on fair value changes	447.00	254.76	794.27	547.63
Other Income	33.72	-	36.01	0.80
Total Income	839.28	638.06	2,078.92	1,854.68
Finance Cost	-	10.27	7.65	10.27
Impairment on financial instruments	6.65	0.37	40.35	2.05
Staff Expenses	83.41	42.73	214.92	116.04
Other operating expenses	95.83	63.69	261.91	198.95
Total Expenses	185.89	117.06	524.83	327.31
Profit before share in profit of Associate and Joint Ventures	-	-	1,554.09	1,527.37
Share of Associates & Joint Ventures, net of tax	-	-	392.82	428.52
Profit before tax	653.39	521.00	1,946.91	1,955.89
Provision for Taxation	(104.48)	(138.53)	(334.32)	(351.34)
Profit after Tax	548.91	382.47	1,612.59	1,604.55

^Standalone

^{Total Income increased by T201.22 crore, representing a 32% year-on-year (YoY) growth. This was primarily driven by:}

^{- An increase in gains from money market instruments by T192.24 crore (75% YoY growth),}

^{- A decrease in interest income from fixed deposits by T264.48 crore (69% YoY decline), due to a shift in the investment portfolio towards money market instruments and}

^{- An increase in dividend income by T235.03 crore.}

^{Total Expenses increased by T68.83 crore (59% YoY), mainly due to:}

^{- An increase in staff costs by T40.68 crore (95% YoY) and}

^{- An increase in other operating expenses by T32.14 crore (50% YoY).}

^{Profit Before Tax (PBT) increased by T132.39 crore, reflecting (25% YoY increase).}

^{Profit After Tax (PAT) increased by T166.44 crore, marking (44% YoY increase).}

^Consolidated

^{Total Income increased by T224.24 crore, a 12% YoY growth, primarily due to:}

^{- An increase of T246.64 crore from money market instruments (45% YoY growth),}

^{- A decrease in interest income from fixed deposits by T85.21 crore (9% YoY), and}

^{- An increase in dividend income by T24.09 crore (11% YoY).}

^{Total Expenses increased by T197.52 crore (60% YoY), driven by:}

^{- An increase in staff costs by T98.88 crore (85% YoY), and}

^{- An increase in other operating expenses by T62.96 crore (32% YoY).}

^{Share of Profit from Associates and Joint Ventures decreased by T35.70 crore (8% YoY).}

^{Profit Before Tax (PBT) decreased by T8.98 crore.}

^{Profit After Tax (PAT) increased by T8.04 crore, reflecting (1% YoY increase).}