Financial services

Dependence on separation and listing of financial services activities

Indian conglomerate Reliance will spin off and list its financial services, a move it says will allow the oil-to-telecom giant to enter and expand into financial services such as consumer and merchant lending business and also to create fintech for “all Indians”.

Reliance Industries, led by billionaire Mukesh Ambani, said in a statement it will incubate, acquire and create joint ventures in the new unit, called Jio Financial Services, to expand its offerings to add insurance, payments , digital brokerage and asset. management.

It plans to offer loans based on proprietary data analytics to supplement and supplement traditional credit bureau-based underwriting. The company already provides loans through its wholesale business to merchants and to consumers through its retail stores.

Reliance Industries, which has consolidated revenue of more than $100 billion, operates the nation’s largest telecommunications network with more than 420 million subscribers, and manages the nation’s largest retail chain with over of 16,000 stores.

A fintech executive, who spoke on condition of anonymity speaking about an adjacent company, said Reliance could hypothetically use its brand name to raise capital at one of the lowest costs in the country, then pay out loans and make good profits. If so, the executive said, Jio Financial Services may become a headache for companies like Tata Capital and Bajaj Finance.

“JFS will be a truly transformational, customer-centric and digitally driven financial services company, delivering simple, affordable, innovative and intuitive financial services products to all Indians,” Ambani said in a statement Friday evening.

“JFS will be a technology-driven company, 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.

Each Reliance shareholder will receive one share of the new company for each share held in the parent company, the company said. The company did not say when it would list Jio Financial.