Jio Financial Services Seeks Approval to Raise Foreign Stake to 49%

Jio Financial Services (JFS), a prominent fintech company, has proposed to its shareholders an increase in the foreign investment limit in its equity capital up to 49%.

Additionally, the company aims to convert into a core investment company (CIC), facilitating fundraising through the government approval route.

According to a stock exchange filing, JFS plans to obtain shareholders’ approval for the incorporation of entities focusing on asset management, financial product distribution, insurance, broking, and asset reconstruction.

The e-voting facility for shareholders will be accessible from May 24 to June 22.

JFS has also applied to the Reserve Bank of India for its conversion into a CIC from a non-banking financial company (NBFC). Foreign investment in a CIC is permissible under the government approval route.

The board of JFS had previously approved foreign investments, including foreign portfolio investments, of up to 49% of its paid-up equity share capital, effective upon its conversion into a CIC on December 27, 2023.

In the fourth quarter of the fiscal year 2023-24, Jio Financial Services recorded a nearly 6% increase in consolidated net profit, amounting to INR 311 crore compared to INR 294 crore reported in the previous December quarter.

The company’s operating revenue witnessed a slight uptick to INR 418 crore in the reported quarter from INR 414 crore in Q3 FY24.

JFS’ boosted profit was primarily attributed to a rise in the share of profit of associates and joint ventures along with reduced tax expenses. Despite signing deals and announcing various verticals, the company is yet to launch operations significantly.

In April 2024, Jio Financial partnered with the US-based investment giant BlackRock to establish wealth management and broking businesses. This collaboration follows their joint venture last year to venture into the Indian asset management space with an initial investment of $300 million.

JFS made its debut on the bourses in August 2023 after being demerged from Reliance Industries Ltd.

Disclaimer: This information is covered based on the latest research and development available. However, it may not fully reflect all current aspects of the subject matter.

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