Reliance Industries Limited will hold its annual general meeting (AGM) with the shareholders on August 28.
Investors will be glued to this 46th Reliance industries AGM as Chairman Mukesh Ambani usually makes key announcements related to growth and expansion plans in these meetings.
While major decisions are expected to unfold around new energy ambitions, succession plans, retail services and the telecom sector, the newly formed Jio Financial Services will be in focus as it was recently listed on the stock exchanges on August 21.
What to expect?
The meeting is expected to lay out a future plan for JFS that was demerged from RIL in July. Ambani is likely to share growth plans for the financial services business following its tie-up with the world’s largest asset manager, BlackRock, to take on India’s $540 billion mutual fund industry.
JFS is likely to enter the B2B credit business first to leverage its large wholesale business network and then consumer lending.
The aim is to lend to consumers and merchants based on proprietary data analytics, and then use it to branch out to insurance, payments, digital broking and asset management, according to Mukesh Ambani.
As various financial services are governed by different regulatory frameworks, we believe, an independent financial services entity will allow us to access the opportunities available in the Indian market, said Ambani in the annual report of RIL.
He also said JFS along with its subsidiaries will leverage the technological capabilities of Reliance and digitally deliver financial services, democratising access to financial services offerings for Indian citizens. “Jio Financial Services aims to provide simple, affordable and innovative digital-first solutions,” said Ambani.
The meeting is also expected to unravel more details about Jio BlackRock.
On July 26, JFS and US-based Blackrock, the world’s largest asset manager, agreed to form a 50:50 joint venture to create an asset management business called Jio BlackRock. The deal aims to deliver tech-enabled access to affordable, innovative investment solutions for millions of investors in India.
Both companies have come together to take a big bite in the growing mutual funds market in India.
Jio BlackRock brings BlackRock’s deep expertise and talent in investment management, risk management, product excellence, access to technology, operations, scale, and intellectual capital around markets, while JFS contributes local market knowledge, digital infrastructure capabilities and robust execution capabilities.
Together, the partnership will introduce a new player to the India market with a unique combination of scope, scale, and resources.
JFS and BlackRock are targeting initial investment of $150 million each in the joint venture. BlackRock handles about $11 trillion or 7 per cent of all global financial assets.
The joint venture will launch operations post-receipt of regulatory and statutory approvals. The company will have its own management team.
“Although lending to consumers and merchants will be JFS’s mainstay, it will look to also bulk up its non-lending side like insurance and asset and wealth management as well. Lending is a tough segment to crack because of lack of customer stickiness,” an official in the know had earlier told ET.
Assets Under Management (AUM) of the Indian mutual fund industry as on June 30 stood at Rs 44,39 lakh crore, according to the Association of Mutual Funds of India. The total number of accounts or folios, as per mutual fund parlance, as on June 30 stood at 14.91 crore. The AUM of the Indian MF Industry has grown from Rs 8.11 lakh crore as on June 30, 2013 to Rs 44.39 trillion as on June 30, 2023, more than five-fold increase in a span of 10 years. The MF Industry’s AUM has grown from Rs 22.86 trillion.
