New Delhi: BlackRock Inc., the world’s largest asset manager, is in talks with Mukesh Ambani’s Jio Financial Services to establish a 50-50 joint venture, focusing on private credit in India. The partnership aims to provide loans to a wide range of businesses, from large corporations to startups. If the deal materializes, this would be BlackRock’s third collaboration with Ambani’s group, following earlier ventures in asset management and stock broking in the country.
SEBI (Securities and Exchange Board of India) has granted in-principle approval for the setup of Jio Financial and BlackRock’s mutual fund business. The two firms plan to tap into India’s growing direct lending opportunities, according to sources familiar with the matter. These sources, who requested anonymity due to the confidential nature of the information, revealed that the joint venture will cater to a diverse range of businesses, from established corporations to budding startups.
This new venture is expected to be a significant step in India’s private credit market, which has seen rapid growth since the global financial crisis. BlackRock and Jio Financial’s partnership is set to benefit from the rising demand for credit from both large enterprises and entrepreneurs in the country’s startup ecosystem.
If finalized, this will mark BlackRock’s third tie-up with a firm controlled by Asia’s richest man, Mukesh Ambani. The partnership between Jio Financial and BlackRock Advisors Singapore Ltd. has already led to the creation of a joint venture company named “Jio BlackRock Investment Advisers Private Limited,” which will offer investment advisory services.
As per a recent filing, SEBI has given its approval via a letter dated October 3, 2024. However, the final registration will only be granted once Jio Financial and BlackRock meet specific requirements outlined by the regulator.
Jio Financial Services Ltd., the financial services arm recently spun off from Reliance Industries, has also secured SEBI’s in-principle approval to establish a mutual fund business in partnership with BlackRock Financial Management. BlackRock, which manages over $10 trillion in assets globally, is eyeing opportunities to grow in India’s financial market.
The private credit market, currently valued at $1.7 trillion globally, has seen rapid expansion post the 2008 financial crisis. Firms like Blackstone Inc. are aggressively pursuing growth in India, seeking opportunities to lend to large enterprises with multiple subsidiaries, as well as new entrepreneurs seeking funding for startups. BlackRock’s APAC Head of Private Credit, Celia Yan, recently emphasized the potential in India, and their goal, along with Jio Financial Services, is to help transform India from a nation of savers to investors. Rachel Lord, BlackRock’s Head of International, echoed this sentiment, stating that investing is key for individuals to reach their financial goals faster.
The proposed mutual fund business will likely adopt a digital-first approach to compete in India’s Rs. 50 lakh crore mutual fund industry. Jio Financial Services has already shown impressive growth, with its consolidated net profit skyrocketing from Rs. 31 crore in the previous fiscal year to Rs. 1,605 crore. The company’s revenue also saw a marginal increase from Rs. 414 crore in the December quarter to Rs. 418 crore.
About BlackRock:
Founded in 1988, BlackRock is an American multinational investment firm that started as a risk management and fixed-income asset manager. Today, it stands as the world’s largest asset manager, with $11.5 trillion in assets under management as of December 31, 2023. Headquartered in New York City, BlackRock operates in 70 offices across 30 countries, serving clients in 100 nations. The firm manages the popular iShares group of exchange-traded funds (ETFs) and is considered one of the “Big Three” index fund managers, along with The Vanguard Group and State Street.
