Reliance Industries Ltd.'s demerged financial services arm, Jio Financial Services, and investment manager BlackRock have signed an agreement to foray into the asset management industry.
The 50:50 joint venture, Jio BlackRock, will deliver tech-enabled access to affordable investment solutions, the Mukesh Ambani-owned oil-to-telecom conglomerate said in an exchange filing on Wednesday. Both companies will initially invest $150 million, or Rs 1,230.2 crore, each in the joint venture.
The new company will have its own management team, but will require regulatory approval before it can begin offering services. Among the more prominent services offered by asset management companies are mutual funds and portfolio management services. Assuming no other company launches a mutual fund in the interim, Jio Blackrock would become the forty-second player in an increasingly crowded industry.
Only last month, Bajaj Finserv Mutual Fund became the forty-first player in the industry, which had assets under management of Rs 44.4 lakh crore as of the end of June.
"The partnership will leverage BlackRock’s deep expertise in investment and risk management along with the technology capability and deep market expertise of JFS to drive digital delivery of products," Jio Financial's President and Chief Executive Officer Hitesh Sethia was quoted in a release as saying.
Meanwhile, BlackRock continues to see potential in India's fast growing economy.
"India represents an enormously important opportunity. The convergence of rising affluence, favourable demographics, and digital transformation across industries is reshaping the market in incredible ways," the release quoted Rachel Lord, chair and head of APAC, BlackRock, as saying.
This would mark BlackRock's second foray into India's asset management industry. After talks to buy out DSP Group's share in their erstwhile partnership, DSP BlackRock, the New York-based asset manager instead sold its 40% stake to its partner in 2018.
Shares of Reliance Industries closed 1.63% higher at Rs 2,526.2 apiece on Wednesday compared to with a 0.50% gain in the benchmark Nifty 50.
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