BlackRock and Jio Financial JV will join the asset management market in India

BlackRock, the world's largest asset manager, has formed a strategic partnership with Jio Financial Services (JFS), led by Mukesh Ambani, to make a significant entry into India's burgeoning asset management sector. This collaboration not only marks BlackRock's re-entry into the domestic market but also provides JFS, a recently separated entity from Reliance Industries, with a robust foundation for its financial services aspirations.

“JFS and BlackRock today announced an agreement to form Jio BlackRock, a 50:50 joint venture that combines the respective strengths and trusted brands of BlackRock and JFS to deliver tech-enabled access to affordable, innovative investment solutions for millions of investors in India,” the two firms said in a joint press release.

This venture represents BlackRock's second attempt to establish a presence in India's rapidly growing asset management landscape. In 2018, the investment manager had exited DSP BlackRock Investment Managers by selling its 40% stake to DSP Group. Just a week ago, JFS achieved a valuation of Rs. 1.66 trillion following a special trading session on stock exchanges, where its shares were priced at Rs. 261.85 each—surpassing analysts' expectations of Rs. 134-224 per share. The asset management sector encompasses various businesses, including mutual funds, portfolio management services, and alternative investment funds (AIFs). However, the joint venture has not yet initially disclosed which specific area it will focus on.

In the wake of the COVID-19 pandemic, India's Rs. 45 trillion mutual fund industry has witnessed the entry of several new players. Seven entities, including Bajaj Finserv, have entered the space by obtaining fresh licenses or acquisitions. Additionally, six others, including Zerodha, are awaiting approvals from the Securities and Exchange Board of India to commence their operations.

Commenting on the partnership with BlackRock, Hitesh Sethia, president and CEO, of JFS, said: “This is an exciting partnership between JFS and BlackRock, one of the largest and most respected asset management companies globally. The partnership will leverage BlackRock’s deep expertise in investment and risk management along with the technology capability and deep market expertise of JFS to drive digital delivery of products.”