India

BlackRock and Jio Financial Forge New Joint Venture to Expand Wealth Management and Brokerage Services in India

BlackRock has intensified its focus on India by forming a new joint venture (JV) with Jio Financial.

Announced on Monday, this partnership aims to establish a wealth management and broking business in India. This move comes shortly after the two companies launched an asset management venture less than a year ago.

The JV plans to capitalize on India's growing wealth management sector, which includes a new wealth management firm followed by a brokerage company. According to a recent report by Jefferies, wealth managers in India oversee financial assets valued between $1 trillion and $1.2 trillion owned by high net-worth individuals.

Additionally, the establishment of the brokerage firm is a strategy to benefit from the increasing number of retail investors in India. These investors are actively participating in the stock market, which is currently experiencing record highs.

Statistics from the Securities and Exchange Board of India (SEBI) highlight a significant growth in trading accounts, which have increased by over 30% to approximately 148 million as of February from the previous year.

Previously in June, BlackRock and Jio Financial had initiated a 50:50 joint venture to start asset management services in India, committing an initial investment of $150 million each. Their goal was to make investment solutions more accessible to Indian investors.

The firms had sought preliminary approval from SEBI to operate their asset management business in October, but they are still awaiting approval.

Following the announcement on Monday, BlackRock's shares saw a 1.7% increase in early trading on the New York Stock Exchange.

Last year marked a significant milestone for Jio Financial Services as it was spun off from Reliance Industries. The new standalone entity was valued at nearly $20 billion, and it continues to expand its operations.