Jio Financial Receives Government Approval To Increase Foreign Investment Cap To 49%

Nitin Konde, Apoorva Bajj

Aug 27, 2024 — 2 min read

Jio Financial Receives Government Approval To Increase Foreign Investment Cap To 49%

The non-bank financial company Jio Financial Services Ltd (JFSL), which is a subsidiary of Reliance Industries, has been in the news recently. The Department of Economic Affairs, Ministry of Finance, authorised JFSL to raise the foreign investment limit to 49% of its total stock on a fully diluted basis, which the firm disclosed recently and could further accelerate its growth trajectory. Foreign Portfolio Investors (FPIs) and other foreign investors will be able to participate more actively as a result of this decision.

The business, which is headed by billionaire Mukesh Ambani, first asked its shareholders for approval to increase the foreign investment limit to 49% in May 2024. This action is not merely a technical modification; it is a strategic manoeuvre designed to attract substantial foreign capital.

In order to stand out in India's very competitive financial services industry, JFSL is actively courting investors from around the world. The capacity to attract investment from outside sources will allow the business to grow by bringing in much-needed finance, as well as international knowledge and ideas.

JFSL's Strong Financial Performance Is the Icing on the Cake

This declaration is made in light of the fact that JFSL had a very successful financial performance during the first quarter of 2024. A consolidated net profit of INR 311 crore was declared by the company for the quarter that ended in March 2024, representing a 6% increase over the previous quarter's figure of INR 294 crore accumulated in December.

In the meantime, the consolidated revenue from operations stayed unchanged INR 418 crore, which is a decrease from the previous quarter's figure of INR 414 crore.

Strategic Collaboration

Strategic actions have been taken by Jio Financial Services to increase its market share. The business established a historic alliance with global asset manager BlackRock, Inc. in April 2024. The two companies are teaming up to launch a wealth management and broking firm.

By delivering digital-first investment products, this partnership would likely revolutionise India's asset management industry and meet the changing demands of Indian investors. By teaming up with BlackRock, JFSL is sending a message that it is serious about innovation and wants to dominate the wealth management industry.

JFSL’s Performance at the Stock Market

The impressive market performance of JFSL since its debut on the stock market in August of last year has captured the interest of investors. At the beginning, the market valuation of the company was more than INR 1.5 lakh crore.

The stock has nevertheless managed to produce positive returns of more than 52% over the past year, even with this small decline. On the other hand, Jio Financial Services is in a great position to attract additional international investments thanks to the recently approved rise in the foreign investment limit, which might lead to even better stock performance in the months to come.