India’s Jio Financial Services, BlackRock to launch asset management venture

MUMBAI, July 26 (Reuters) – India’s Jio Financial Services (JIOF.NS), part of billionaire Mukesh Ambani led Reliance Group, and U.S.-based BlackRock Inc (BLK.N) will form a 50:50 joint venture to launch asset management services in India.

The two companies are targeting an initial investment of $150 million each in the joint venture, Jio Financial said in a statement on Wednesday.

The announcement comes days after Jio Financial Services was demerged from Reliance Industries, with the markets ascribing a valuation of nearly $20 billion to the venture which is yet to build out a business in India’s fast growing financial services sector.

“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,” said Hitesh Sethia, CEO of JFS in the statement.

India’s asset management industry has seen rapid growth in recent years and has 44.3 trillion Indian rupees ($540.4 billion) in assets under management.

The joint venture will launch a “digital-first” offering following regulatory approvals, said the statement, without giving a timeline within which it plans to begin operations.

The venture is BlackRock’s second attempt at an entry into India’s asset management industry. It exited an earlier joint venture with local financial firm DSP Group in 2018.

“Today marks a major move for BlackRock as we work to expand our footprint through a forthcoming joint venture in India with Jio Financial Services,” wrote Larry Fink, chairman and CEO of BlackRock in a post on his LinkedIn page.

Despite strong growth, penetration of financial investment products in India is low relative to the size of the economy.

The ratio of mutual fund assets under management to the country’s gross domestic product is 16% compared to the global average of 63%, according to a report from local brokerage house AngelOne released in May.

($1 = 81.9720 Indian rupees)

Reporting by Ira Dugal and Jayshree Upadhyay; Editing by Kirsten Donovan and David Evans

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