Jio, BlackRock enter broking, wealth management services

Reliance Industries Ltd chairman Mukesh Ambani-led Jio Financial Services Ltd has announced a tie-up with US-based BlackRock Inc, the world’s largest asset manager, to venture into stockbroking and wealth management.

Jio Financial and BlackRock had in July last year set up a joint venture to launch Jio BlackRock, an asset management firm, with an initial investment of $300 million.

Jio BlackRock had then said that it would take at least a year to commence operations after obtaining the required regulatory and statutory approvals, and putting in place its own management team.

“The company (Jio Financial), BlackRock Inc., and BlackRock Advisors Singapore Pte. Ltd have signed an agreement to form a 50:50 joint venture for undertaking wealth business, including the incorporation of a wealth management company and subsequent incorporation of a brokerage company in India,” Jio Financial informed the stock exchanges on Monday, 15 April

“This joint venture further strengthens the relationship with Blackrock,” with whom the company had entered into a tie-up “to transform India’s asset management industry through a digital-first offering and democratize access to investment solutions for investors in India,” it added.

The launch of the wealth management and broking business is subject to regulatory and statutory approval, it added.

Shares of Jio Financial jumped about 5% from the previous session’s close in early morning Tuesday morning trading before shedding gains.

BlackRock has a strong presence in India, with offices in Mumbai, Gurgaon, and Bangalore, and a workforce of over 2,400 employees.

BlackRock earlier partnered with asset management firm DSP as a minority stakeholder, holding 40% equity in DSP BlackRock Investment Managers, before exiting the partnership in 2018 citing challenges in integrating the business onto its operating platform.

The joint venture will compete with already established asset management firms such as SBI Mutual Fund, ICICI Prudential Mutual Fund, HDFC Mutual Fund, and Nippon India Mutual Fund.