BlackRock and Mukesh Ambani-led Jio Financial Services (JFS) have announced a strategic collaboration to venture into India’s asset management space. The partnership aims to create a 50:50 joint venture named “Jio BlackRock,” combining the strengths and reputable brands of both companies to provide tech-enabled access to affordable and innovative investment solutions for millions of investors in India. The joint venture will commence its operations once it obtains the necessary regulatory and statutory approvals.
For BlackRock, the world’s largest asset manager, this move marks its re-entry into the domestic market after exiting DSP BlackRock Investment Managers in 2018. The latter had sold its 40% stake to DSP Group, making way for its return to India’s rapidly growing asset management industry.
On the other hand, JFS, a recently hived-off arm of Reliance Industries, stands to benefit significantly from this partnership. The company received a valuation of Rs. 1.66 trillion after a special trading session, where its shares were priced at Rs. 261.85 apiece, surpassing analysts’ expectations. With BlackRock’s expertise in investment and risk management and JFS’s technology capabilities and market expertise, the joint venture aims to capitalise on the booming asset management sector in India.
|Companies Involved||BlackRock and Mukesh Ambani-led Jio Financial Services (JFS)|
|Joint Venture Name||Jio BlackRock|
|Purpose of Collaboration||To venture into India’s asset management space|
|Ownership Structure||50:50 joint venture|
|Objectives||Provide tech-enabled access to affordable and innovative investment solutions in India|
|BlackRock’s Background||World’s largest asset manager|
|BlackRock’s Previous Presence||Re-entering the Indian market after exiting DSP BlackRock Investment Managers in 2018|
The asset management space in India comprises various businesses such as mutual funds, portfolio management services, and alternative investment funds (AIFs). However, the specific area that the newly formed Jio BlackRock joint venture will focus on has not been disclosed yet.
Since the onset of the Covid-19 pandemic, the Indian mutual fund industry, valued at Rs. 45 trillion, has witnessed an influx of new players. Around seven new entrants have emerged, either through fresh licensing or acquisitions, with Bajaj Finserv being the most recent addition. Six other companies, including Zerodha, are currently awaiting approvals from the Securities and Exchange Board of India to commence their operations in this lucrative space.