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  • RIL announces insurance entry; JIo Financial to offer life, general, health products

    RIL announces insurance entry; JIo Financial to offer life, general, health products

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    Reliance Industries on Monday announced its plans to foray into the insurance sector through Jio Financial Services (JFS), which will provide “simple, yet smart” life, general, and health insurance products through a digital interface.

    Jio Financial is looking to potentially partnering with global players, and will use predictive data analytics to co-create contextual products with partners to cater to customer requirements, RIL Chairman Mukesh Ambani said at the AGM.

    Ambani attributed Jio Financial’s growth potential to a digital-first architecture, healthy capitalisation, net worth of Rs 1.2 lakh crore and strong board of management led by K.V. Kamath.

    “Just like Jio and Retail, JFS too will prove to be an invaluable addition to the Reliance ecosystem of customer-facing businesses,” he said adding that the recent de-merger to set up Jio Financial has been like a “mini bonus” for RIL’s long-term investors.

    Each shareholder received one share of Jio Financial for every share of RIL held by them.

    Lending, payments

    “JFS is born to accelerate the replication of India’s dazzling growth story in Bharat,” Ambani said adding that the focus will be on the informal and underserved sectors in rural, semi-urban, and urban areas, with the aim of accelerating inclusive growth.

    This the NBFC plans to achieve by transforming and modernising financial services, with a digital-first approach which will help simplify products, reduce cost of service, and expands reach, he said, adding that for SMEs, merchants, and self-employed entrepreneurs, ease of doing business must mean ease in borrowing, investments, and payment solutions.

    In payments, Jio Financial will consolidate its payments infrastructure with an offering for both consumers and merchants, Ambani said, adding that the company will not just compete with current industry benchmarks but also “explore path-breaking features such as blockchain-based platforms and CBDC”.

    BlackRock JV

    Ambani also touched upon Jio Financial’s recent asset management JV with US-based BlackRock. The the world’s largest asset manager, BlackRock manages worth over $ 11 trillion.

    “Jio Financial Services brings digital infrastructure capabilities and local market knowledge, and BlackRock brings global investment and risk management expertise. Together, we will aim to transform India’s asset management industry through a digital-first offering and democratise access to affordable, innovative investment solutions,” said Larry Fink, Chairman and CEO of BlackRock.

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  • RIL announces demerger of financial services undertaking, to list Jio Financial Services

    RIL announces demerger of financial services undertaking, to list Jio Financial Services

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    Reliance Industries Limited (RIL) will demerge its financial services undertaking and will create a separate entity, which will be named Jio Financial Services Limited (JFS), the company said on Friday. The new entity, JFS, would be listed on the Indian stock exchanges.  

    “The Board of Directors of Reliance Industries Ltd (RIL), at its meeting held today (Friday), approved a Scheme of Arrangement amongst RIL, Reliance Strategic Investments Limited (RSIL) and their respective shareholders and creditors in terms of which, RIL will demerge its financial services undertaking into RSIL (to be renamed Jio Financial Services Limited or JFSL),” RIL said in a statement. 

    The financial services are currently under Reliance Strategic Investments Limited (RSIL), which is a wholly-owned subsidiary of RIL and a non-banking financial company registered with the RBI.

    Pursuant to the scheme, the shareholders of RIL will receive one equity share of JFS of face value Rs 10 for one fully paid-up equity share of Rs 10 held in RIL, the Mumbai-headquartered conglomerate said.

    The investment of RIL in Reliance Industrial Investments and Holdings Limited (RIIHL), which is a part of the financial services undertaking of Reliance Industries, will stand transferred to JFSL. 

    JFS will acquire liquid assets to provide adequate regulatory capital for lending to consumers and merchants, and incubate other financial services verticals such as insurance, payments, digital broking, and asset management for at least the next three years of business operations.

    The regulatory licenses for the key businesses are in place, the statement added.

    JFS and its subsidiaries will focus on the digital delivery of financial products to democratise financial services access for 1.4 billion Indians. It also plans to launch a consumer and merchant lending business based on proprietary data analytics to complement and supplement the traditional credit bureau-based underwriting, the RIL said.

    RIL MD and Chairman Mukesh Ambani said the JFS will be a truly transformational, customer-centric, and digital-first financial services enterprise offering simple, affordable, innovative, and intuitive financial services products to all Indians. JFS, he said, will be a technology-led business, delivering financial products digitally by leveraging the nationwide omnichannel presence of Reliance’s consumer businesses. 

    “JFS is uniquely positioned to capture multiple growth opportunities in financial services bringing millions of Indians into formal financial institutions,” Ambani added. 

    Citi, Morgan Stanley and Goldman Sachs are acting as financial advisors and Khaitan & Co is acting as legal advisor in relation to the proposed transaction.
     

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