Jio Financial Services recently separated from its parent company to expand its presence in the financial market. Interestingly, there’s a new development – BlackRock, the world’s largest management firm, is returning to India and teaming up with Jio Financial Services to form a new joint venture – Jio BlackRock.
This is BlackRock’s Re-Return
You might remember DSP BlackRock Mutual Fund, a joint venture between DSP and BlackRock, which was a prominent asset management company in India. However, in 2018, the partnership ended, and DSP acquired BlackRock’s stake. But now, BlackRock is making a fresh entry into India, partnering with Jio this time.
Jio BlackRock: The Joint Venture
On July 26, Jio and BlackRock announced their joint venture, named Jio BlackRock, with an equal 50:50 partnership.
The joint venture between Jio and BlackRock aims to provide tech-enabled and affordable investment solutions to Indian investors. With both partners investing $150 million each, totaling $300 million, they are poised to become the 44th player in the Indian market, challenging the dominance of SBI MF, ICICI Prudential MF, and HDFC MF.
Also Read: Explained: New Proposed Rule by SEBI On FPI Investments
Why Jio Prefers BlackRock for Partnership?
BlackRock, based in New York, is renowned in the investment and management world. With over 70 offices in more than 30 countries, it serves clients globally. Jio is optimistic that this partnership will harness BlackRock’s extensive market expertise and technological capabilities to enhance Jio Financial Services’ digital offerings.
Why BlackRock is Returning in India?
Rachel Lord, BlackRock’s Asia-Pacific head, sees India as an “enormously important opportunity.” The Mutual Funds Assets Under Management in India have doubled in the past five years, reaching Rs 44.39 trillion ($542 billion). Favorable demographics, rising affluence, and digital transformation are driving significant changes in various industries, motivating the partnership to revolutionize India’s asset management sector.
Impact on India‘s Financial Health and Potential Disruption
The Indian Mutual Fund industry currently stands at Rs 44.39 trillion. The entry of Jio BlackRock into the Indian MF market could bring about significant changes. Leveraging Jio’s technical expertise and growing customer base alongside BlackRock’s track record as a global fund house, the partnership has the potential to reshape the industry dynamically.
Competition for Existing Players:
Experts believe that Jio Financial Services (JFS) is already a significant player in the non-banking financial companies (NBFC) sector with a substantial size of approximately ₹1.5 lakh crore. Now, with the partnership with BlackRock, JFS’s entry could pose challenges for existing NBFCs. However, the execution of JFS’s strategies and underwriting expertise will determine its impact in the coming quarters.
Also Read: Safe Reputed Penny Stocks to Buy in 2023: Some Even Give Good Dividends!
