What the JV with BlackRock means for Jio Financial Services

28 Jul 2023 , 11:50 AM

Mukesh Ambani, the chairman of Reliance Industries, has made his intentions apparent by demerging his financial services company and creating a new company called Jio Financial Services (JFS). 

By throwing the cat among the pigeons, he will cause a stir in the financial services industry. To take advantage of its extensive wholesale business network, JFS is likely to enter the B2B credit market first, followed by consumer loans. 

The large data trails that Ambani’s massive retail and telecom firms produce are his main weapon in addition to his enormous cash hoard. Ambani claims that the plan is to employ unique data analytics to underwrite loans to customers and business owners before expanding into the insurance, payment, digital broking, and asset management industries.

‘Aladdin, in its beginning days, began as a risk-management technology, helping to understand the answers to very basic questions like: What do I own?,’ Sudhir Nair told ET, the global head of Aladdin at BlackRock and a senior managing director and member of Blackrock’s Global Executive Committee. Where do I own it, exactly? And how has this asset performed in comparison to the benchmark? And it continued to expand. You can service your clients more effectively and run your business more effectively if you can keep all of your staff on the same page, using the same data, and collaborating on the same technology.

Ambani and Aladdin have joined up to take a bite out of the expanding mutual fund sector in India. They combine Reliance’s enormous money, market knowledge, and execution strength with BlackRock’s investing and risk management know-how and cutting-edge technology. 

As of June 30, the Association of Mutual Funds of India reported that the AUM of the Indian mutual fund sector was Rs 44,39 lakh crore. In mutual fund lingo, there were 14.91 crore total accounts or folios as of June 30. 

The AUM of the Indian MF Industry increased more than five times in just ten years, from Rs 8.11 lakh crore as of June 30, 2013, to 44.39 trillion as of June 30, 2023. The AUM of the MF Industry increased by nearly doubling in just five years, from Rs 22.86 trillion as of June 30, 2018, to Rs 44.39 trillion as of June 30, 2023.

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