Mumbai, October 1: Jio Financial Services Limited (JFSL) and Germany’s Allianz Europe B.V. have jointly invested a total of ₹ 640.10 crore into their general insurance venture, Jio Allianz General Insurance Limited. The equal partners invested ₹ 320.05 crore each on a rights issue basis to strengthen their JV, as it gears up for its commerical plans.
According to a regulatory filing submitted by Jio Financial Services to stock exchanges, the fresh capital injection will be deployed to fund ongoing business operations and build technology infrastructure as the JV aims to launch its insurance business subject to requisite approvals from the IRDAI and other government agencies.
The capital expansion was structured through a rights issue, under which both promoters subscribed to and were allotted 32,00,50,000 equity shares each at a face value of ₹ 10 per share for cash at par. The equal participation ensures that the joint venture maintains its 50:50 shareholding structure between Jio Financial Services and Munich-headquartered Allianz Group.
With this transaction, Jio Financial’s aggregate investment in Jio Allianz General Insurance has reached ₹ 375 crore to date, following its initial setup capital contributions. The company confirmed that the transaction was executed at arm’s length as a related-party transaction under applicable rules and required no additional regulatory or governmental approvals for the share allotment.
Following the news, shares of Jio Financial Services closed at ₹ 216.60 on the BSE, marking a minor decline of 0.60%
Through this JV, Reliance is hoping to use its unprecedented reach through the Jio brand to expand into insurance. The JV with Allianz was announced in July this year, even as the company is aiming to build a full stack financial services arm with Mutual Funds, loans and other products under the Jio umbrella.
The Mukesh Ambani-led company is aiming to replicate the Campa Cola and Jio playbook here, leveraging its financial and operational strengths to become a household name. How this will turn out remains to be seen, as this will take time as the human factor remains highly important in the financial sector.
