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Tag: jio financial services

  • Jio Financial unit to buy $4.32B of telecom gear from Reliance Retail | TechCrunch

    Jio Financial unit to buy $4.32B of telecom gear from Reliance Retail | TechCrunch

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    Jio Leasing Services Ltd (JLSL), a subsidiary of Jio Financial Services, plans to buy customer premises equipment, devices and telecom equipment worth $4.32 billion from Reliance Retail over the next two financial years, according to a postal ballot notice (PDF) sent to shareholders seeking approval of the deal.

    JLSL is entering the business of operating a Device-as-a-Service (DaaS) model — it will lease telecom devices along with associated services to customers of Reliance Jio Infocomm. Reliance Retail, valued at about $100 billion Reliance Industries in 2023, will sell the devices to JLSL at cost plus margin.

    The deal will be one of the largest equipment transactions in the Indian telecom sector. By shifting to a leasing model through JLSL, Jio aims to make it more affordable for customers to get access to the latest 5G devices and attract more subscribers to its network.

    The transaction will be spread over the financial years ending March 2025 and March 2026.

    Jio Financial Services was a little-known, non-bank financial subsidiary of Reliance Industries until the conglomerate demerged the unit and listed it last year. Reliance still owns more than 80% of the company.

    Jio Financial Services also plans to offer its payment aggregator and gateway services to Jio Platforms and Reliance Retail, according to the notice.

    The deal signifies Jio Financial Services’ growing interest in businesses beyond lending. Via the DaaS model, the company is planning to lease devices like laptops and its mobile hotspot AirFiber to businesses.

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    Manish Singh

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  • What is Jio Financial Services and why is it spooking Paytm’s stock?

    What is Jio Financial Services and why is it spooking Paytm’s stock?

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    Ever since Reliance Industries’ announcement of listing its financial services undertaking Jio Financial Services Limited on the stock markets last month, the investor interest in the firm has increased manifold.

    “With secular growth drivers, the Indian financial services sector is poised to undergo a digital transformation. The sector presents a large, under penetrated and growing addressable market, especially for retail and small-business focused product categories. JFSL and its subsidiaries will leverage the technology capability of Reliance and focus on digital delivery of financial products to democratise financial services access for 1.4 billion Indians,” said RIL in a stock exchange filing in October.

    “Reliance has been developing and fostering a vibrant digital led-financial services platform through various digital applications. Reliance has developed best in-class applications having high customer engagement metrics and differentiated value propositions in their respective categories. The current footprint touches more than 20 million consumers. JFS plans to launch consumer and merchant lending business based on proprietary data analytics to complement and supplement the traditional credit bureau-based underwriting. JFS will continue to evaluate organic growth, joint-venture partnerships as well as inorganic opportunities in insurance, asset management and digital broking segments,” RIL added.

    On Tuesday, Macquarie’s report on Jio Financial Services had spooked Paytm stock, diving it to its record low, as the global financial services group sees Jio Financial Services becoming India’s fifth largest financial services firm. With investors anticipating a huge disruption for the Noida-headquartered Paytm, the company’s shares fell 11 per cent on BSE to close trading at Rs 475 apiece.

    HDFC Bank, State Bank of India, ICICI Bank, and Axis Bank are the four top companies in the business. JFS has significant scope to expand its balance sheet. “Assuming 6.1 per cent stake in Reliance Industries Ltd realised over time, with a Rs 1 trillion net worth JFS could be the 5th largest financial services firm in the country,” said Suresh Ganapathy, Aditya Suresh, and Param Subramanian in the report.

    The Reliance firm can disrupt the payments business and become a threat to other fintech models, said the report.

    Jio Financial Services, Macquarie said, has articulated that it plans to launch a consumer and merchant lending business based on proprietary data analytics to complement and supplement the traditional credit bureau-based underwriting. Macquarie said the focus seems to be on consumer and merchant lending, which is the mainstay of NBFCs like Bajaj Finance and fintech firms like Paytm.

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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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