Jio Financial Services shares spike 5% after company announces JV with BlackRock

Jio Financial Services, the financial subsidiary of Reliance Industries, witnessed a significant surge of 5% during today's intraday session, reaching ₹371.95 per share.

This increase follows the company's announcement, made through an exchange filing on Monday, regarding the signing of an agreement to establish a 50:50 joint venture with BlackRock.

The venture aims to engage in wealth management activities, including the establishment of a wealth management company and, subsequently, a brokerage firm in India.

The company also informed investors that the launch of the wealth management and broking business is subject to regulatory and statutory approvals.

The broking and wealth management sector in India is experiencing significant growth, fueled by the surge in demat accounts in recent years.

According to a Reuters report citing Jefferies, India's wealth managers oversee approximately $1–1.2 trillion in financial assets belonging to high net-worth individuals in the country.

Projections indicate promising prospects for the wealth management industry, with expectations of a substantial rise in high-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs) in India.

Over the past five years, individuals with incomes surpassing Rs. 1 crore have seen a 15% increase, with forecasts suggesting their numbers will reach 3.40 lakhs in the next five years, contributing to the sector's expansion.

In July 2023, Jio Financial Services and BlackRock announced a 50:50 joint venture with a USD 150 million investment each to venture into the asset management sector in India.

Jio Financial Services submitted its application to the Securities and Exchange Board of India (Sebi) on October 19.

According to Sebi's status report as of December 31, 2023, the application is "under process."