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<ul><li><keyword id="19896380" type="General" weightage="20" keywordseo="reliance-industries" source="keywords">Reliance Industries</keyword> is expected to launch an IPO for <keyword id="6354504" type="General" weightage="20" keywordseo="reliance-jio" source="Orion">Reliance Jio</keyword> in 2025.</li><li>Reliance Retail is expected to go public after <keyword id="19906886" type="General" weightage="20" keywordseo="jio" source="keywords">Jio</keyword>, with no date fixed yet.</li><li>The <keyword id="7784314" type="General" weightage="100" keywordseo="reliance-jio-ipo" source="Orion">Reliance Jio IPO</keyword> will emerge as the country’s biggest IPO, beating the Hyundai IPO.</li></ul>Mukesh Ambani-led Reliance Industries is reportedly gearing up to launch the initial public offering (IPO) of its telecom arm, Reliance Jio in 2025. The telco will join its competitors, Bharti Airtel and Vi, which are already public. According to a<a href="https://www.reuters.com/world/india/ambanis-reliance-jio-ipo-set-2025-retail-debut-much-later-sources-say-2024-11-04/"> report</a> by Reuters, Reliance Jio is expected to go public in 2025 and the IPO for the retail arm is planned later. As per two sources familiar with the matter, <keyword id="19916798" type="General" weightage="20" keywordseo="mukesh-ambani" source="keywords">Mukesh Ambani</keyword> plans on sticking to the timeline he mentioned in 2019, where he said he will “move towards” listing in five years. <div type="Article" hostid="261" msid="114931927" title="October auto sales – Maruti Suzuki and Tata Motors report a decline, Mahindra continues to grow" mstype="2" mssubtype="0"></div> The company has firmed up plans of taking the telecom arm public as it feels the company has achieved a stable business and revenue stream. Jio is currently the biggest telecom operator in India, with over 471 million subscribers as of August 2024. Reliance Industries has raised over $25 billion for the company’s digital, telecom and retail businesses from investors like KKR, Abu Dhabi Investment Authority, General Atlantic and more. <h2>Reliance <keyword id="6059106" type="General" weightage="20" keywordseo="jio-ipo" source="Orion">Jio IPO</keyword> to be India’s biggest</h2>Existing rules state that companies that are valued at ₹1 lakh crore or more need to sell at least 5% of total shares during an IPO. Jio is currently valued at $112 billion (₹9.42 lakh crore) as per Jefferies. A 5% stake sale would put the IPO at around ₹47,100 crore, beating the recently concluded IPO of Hyundai Motor India, which raised ₹27,870.16 crore. <h2>Retail IPO further away</h2>While no timeline has been mentioned, the retail arm’s IPO has reportedly been pushed further away, as the company feels it needs to address internal business and operational challenges. Not only this, the company reportedly wants to avoid two big IPOs hitting the Dalal street in the same year. With Jio’s IPO planned for 2025, we might see the retail arm going public in 2026 or later. Reliance Retail operates over 3,000 supermarkets and also deals in the e-commerce segment. The company feels the retail arm has grown “too fast” and needs some stability before the IPO. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/upcoming-ipos-this-week-swiggy-niva-bupa-health-insurance-and-more/slidelist/114937405.cms">Upcoming IPOs this week – Swiggy, Niva Bupa Health Insurance and more</a> <a href="https://www.businessinsider.in/business/auto/news/october-auto-sales-maruti-suzuki-and-tata-motors-report-a-decline-mahindra-continues-to-grow/articleshow/114931927.cms">October auto sales – Maruti Suzuki and Tata Motors report a decline, Mahindra continues to grow</a> <a href="https://www.businessinsider.in/tech/mobile/news/oneplus-13-announced-with-snapdragon-8-elite-6000mah-battery-and-more/articleshow/114842638.cms">OnePlus 13 announced with Snapdragon 8 Elite, 6,000mAh battery and more</a>

Reliance Jio IPO – India’s biggest telco to go public in 2025, retail IPO further away

New Delhi [India], July 12 (ANI): <keyword id="20043730" type="General" weightage="20" keywordseo="Jio-Financial-Services" source="keywords" meta.keywordsubtype="org" meta.entityname="Jio Financial Services" meta.hostid="261" meta.entityid="Jio Financial Services">Jio Financial Services</keyword> has received the nod from the <keyword id="19899810" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword> (<keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword>) to convert into a <keyword id="20871282" type="General" weightage="20" keywordseo="Core-Investment-Company" source="keywords">Core Investment Company</keyword> (CIC) from a Non-Banking Financial Company (<keyword id="19938496" type="General" weightage="20" keywordseo="NBFC" source="keywords">NBFC</keyword>). The company in an official statement on Thursday stated that "Further to the disclosure dated November 21, 2023, the Company has today received from the Reserve Bank of India approval for conversion of the Company from Non-Banking Financial Company to Core <keyword id="19895437" type="General" weightage="20" keywordseo="investment" source="keywords">Investment</keyword> Company." According to the Reserve Bank of India, a CIC is a specialised NBFC with an minimum asset size of Rs 100 crore. The RBI's circular dated December 20, 2016 stated that, a CIC's main business is the acquisition of shares and securities with certain conditions. One of the conditions stipulated by the central bank is that the CIC holds not less than 90 percent of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies. The transition from an NBFC to a CIC involves several key changes in the company's operational framework. As a Core Investment Company, <keyword id="2003276" type="General" weightage="20" keywordseo="Jio" source="Orion">Jio</keyword> Financial Services will primarily focus on investments in and the management of its subsidiaries companies. The transformation to a CIC structure would enable Jio Financial Services to delineate the financials and operations of each subsidiary, to provide better value discovery for investors. Unlike typical NBFCs, CICs are non-deposit taking financial companies that have their assets predominantly invested in the equity shares, preference shares, or debt instruments of their group companies. As a CIC, the company gains greater operational flexibility. It can now focus on core investment activities without engaging in other financial services. The CICs can explore different sectors and diversify their investment portfolio. This flexibility allows them to adapt to changing market conditions. The shares of the company also surged more than 1.5 per cent during the opening session on Friday, and stands at Rs 353.25 at the time of filing this report. (ANI)

Jio Financials gets RBI nod to become Core Investment Company

In a boost to Elon Musk's <keyword id="20034452" type="General" weightage="20" keywordseo="starlink" source="keywords">Starlink</keyword>, Communications Minister Scindia has said the spectrum for satellite broadband will be allocated and not auctioned as sought by Indian billionaires Mukesh Ambani and Sunil Mittal. The satellite broadband spectrum will however be not given free and sector regulator Trai will fix a price for the resource, he told PTI in a text and video interview. "Every country has to follow the <keyword id="20848482" type="General" weightage="20" keywordseo="international-telecommunications-union" source="keywords">International Telecommunications Union</keyword> (ITU), which is the organisation that lays out the policy for spectrum in space or satellites, and the ITU has been very clear in terms of the spectrum being given out on an assignment basis. In addition, if you look across the world today, I cannot think of a single country that auctions spectrum for satellite," Scindia said. India is a member of the International Telecommunication Union (ITU), a UN agency for digital technology. Musk's Starlink and global peers like Amazon's Project Kuiper back an administrative allocation. While Ambani's Reliance Jio has been vocal about the need to allocate such spectrum through an auction to provide a level playing field to legacy operators who buy airwaves and set up infrastructure like telecom towers, Mittal last month at an industry event where Prime Minister Narendra Modi was also present articulated the need to use bidding for such allocation. Jio and Mittal's Bharti Airtel - India's largest and second-largest operators, respectively - feel that giving away the satellite broadband airwaves at a pre-decided price by the government will create an uneven playing field since they had to compete in an auction to get spectrum for their terrestrial wireless phone networks. The two are vying for a piece of the satellite broadband segment as well. Musk-led Starlink is demanding administrative allotment of licences in line with the global trend as it looks to tap into the world's fastest-growing mobile telephony and internet market. Scindia said the Telecom Act of 2023 passed in December has put the matter in 'Schedule 1', which means that the Satcom spectrum will be allocated administratively. Such an allocation will be at a government-decided price, and allow foreign firms like Starlink to offer voice and data services. If the spectrum were to be auctioned, it would have made it costlier for Starlink to roll out services. Starlink has applied for a licence to start operations in the country. Scindia, however, offered no clues on the fate of his application. The minister said that the regulatory process is very clear and transparent. The new Telecom Act has been passed, and the Satellite spectrum is very clearly a part of that in schedule one, he pointed out. "...and therefore, we are open to looking at the application of any entity that wants to invest in India at this point in time. I think only one or two licenses have been given out. And whoever else wants to participate, India is surely going to welcome that," the minister said. Last month, Musk, in a post on X, termed the demand made by Jio for shunning sector regulator Trai's consultation paper on satellite broadband being allocated and not auctioned as "unprecedented", and when Mittal made the pitch in the presence of the Prime Minister, he asked if it was "too much trouble" to allow Starlink to provide internet services in India. This was perhaps the first time that Musk, whose networth of USD 241 billion is more than the combined wealth of Ambani, Mittal and Gautam Adani, had spoken directly against demands for a level playing field made by the Indian firms. Musk, the mind behind PayPal, founder of Tesla and SpaceX and owner of X (formerly Twitter), uses his social media platform on a daily basis to make his views known on a vast array of topics.

In a win for Elon Musk, Scindia says no to spectrum auction pitch from Ambani, Mittal

<ul><li>Skoda recently launched the Kylaq SUV, the company’s latest entry-level subcompact SUV.</li><li>The company has announced its plans to launch an electric vehicle in India in 2025.</li><li>The Skoda Enyaq EV’s updated version will debut in India next year.</li></ul>Skoda Auto will roll out its electric vehicle in the Indian market in 2025. In an exclusive interaction with ANI Skoda Auto Brand Director Petr Janeba says Skoda's European bestseller, the Enyaq EV, was initially slated for an Indian debut this year but postponed to next year for an updated version. Janeba says a significant facelift planned for the model in March has led the company to hold off until the new version, featuring Skoda's latest design language, is ready. He said, "We have one of the best-selling EVs in Europe our European Enyaq. The car was tested, and the car was prepared for India. We have actually stopped bringing the car this year. Because there will be a huge facelift of the Skoda Enyaq coming in March following the new design language." He added, "We actually can choose one of the three EV cars coming to India or all three." Skoda is closely monitoring India's changing EV policies, especially the CAFE3 (Corporate Average Fuel Economy) norms set to be introduced in April 2027. On further investment in India Janeba highlighted the importance of a consistent regulatory environment, as state-level EV and hybrid tax policies currently vary widely, impacting long-term planning. "And within this plan, we understand nobody can survive in India without having a deeper localised CKD EV in India. We are ready for this. We are ready in Pune to make another investment for the car and for the production to get it. At the end of the day, we still take our time in order to decide the right measure car for the market, seeing the new competitors coming on the EVs." Said Janeba Skoda already has two manufacturing units in India, in Chhatrapati Sambhaji Nagar and Pune. EVs are planned to be manufactured in their Pune plant For the production, he stated, "In the same factory in Pune, Chakan we will be producing EVs. Currently we have increased because of the Kylaq the production capacity in Pune to 250,000 units a year and we will be increasing further once it is needed either for the current cars because of the export or because of the Indian demand or for the new cars like EVs." The facility is also set to support EV production with deep localisation efforts to make Skoda's electric lineup more affordable for Indian consumers. Piyush Arora, India CEO, Skoda Auto echoed this sentiment, expressing confidence that Skoda's expanded product offerings will capture the growing sub-four-meter SUV segment, a category that represents nearly 30 per cent of India's automotive market. "With the new Kodiaq and other upcoming models, we are aiming for a 5 per cent market share in the medium term," he added. Skoda's commitment to India extends beyond manufacturing. Arora highlighted the company's investment in local engineering talent and its dealer and supplier networks. "Our technical centre in India plays a crucial role in developing products like the Kodiaq, which was fully designed in India," he noted, calling it a testament to India's engineering prowess and the company's long-term vision for the region. With inputs from ANI. SEE ALSO: <a href="https://www.businessinsider.in/business/auto/news/skoda-kylaq-suv-launched-in-india-starting-at-7-89-lakh/articleshow/115013668.cms">Skoda Kylaq SUV launched in India starting at ₹7.89 lakh</a> <a href="https://www.businessinsider.in/stock-market/webstories/swiggy-ipo-gmp-risk-factors-and-all-you-need-to-know/slidelist/115004939.cms">Swiggy IPO – GMP, risk factors and all you need to know</a> <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-ipo-indias-biggest-telco-to-go-public-in-2025-retail-ipo-further-away/articleshow/114944496.cms">Reliance Jio IPO – India’s biggest telco to go public in 2025, retail IPO further away</a>

Skoda plans to launch an updated electric vehicle in India in 2025

Mobile phone users might have to spend notably more for their recharge packs after the general election, as reports indicate that telecom firms are gearing up for a fourth round of <keyword id="891186" type="General" weightage="20" keywordseo="tariff-hikes" source="Orion">tariff hikes</keyword> in recent times. According to a report by brokerage Axis Capital, a meaningful hike of approximately 25% by operators is anticipated soon. This surge is attributed to a stable competitive environment, the necessity to bolster profitability post heavy <keyword id="21245910" type="General" weightage="20" keywordseo="5G-investments" source="keywords">5G investments</keyword>, and ongoing government support. Despite the apparent magnitude of the increase, the report suggests it should be manageable for both urban and rural users. Urban households may witness a rise in telecom expenditure from 3.2% to 3.6% of total expenditure, while for rural subscribers, spending could escalate from 5.2% to 5.9%. Analysts predict that the consumers are likely to remain loyal and pay up, especially if they continue to enjoy high-speed connectivity — a vital need of these modern times. For <keyword id="20055601" type="General" weightage="20" keywordseo="telecom-operators" source="keywords">telecom operators</keyword>, the projected roughly 25% hike in headline rates is expected to correspond to a 16% growth in the average revenue per user (ARPU), as estimated by Axis Capital. While <keyword id="2003276" type="General" weightage="20" keywordseo="jio" source="Orion">Jio</keyword> reported an ARPU of Rs 181.7 for the quarter ending March, Bharti Airtel and <keyword id="19899016" type="General" weightage="20" keywordseo="vodafone-idea" source="keywords">Vodafone Idea</keyword> (Vi) are yet to disclose their March quarter numbers. However, their figures stood at Rs 208 and Rs 145 respectively for the October-December 2023 period. Peeyush Vaish, TMT industry leader at Deloitte, South Asia, anticipates a 10-15% increase in ARPUs, adding approximately Rs 100 per subscriber by the end of this calendar year. This hike is expected to be driven by price increases for 4G/5G bundled packs and the phasing out of low-value packs. Analysts foresee Bharti Airtel and Jio emerging as the primary beneficiaries of the <keyword id="21656632" type="General" weightage="20" keywordseo="wireless-pack-price-hike" source="keywords">wireless pack price hike</keyword>. While Vi is also expected to boost its ARPU by fortifying its network and minimising subscriber churn, the overall revenue impact may still be limited compared to its competitors. At the end of Q4 FY24, Jio’s total assets stood at Rs 4,87,405 crore, while its net profit from January to March climbed to Rs 5,337 crore from Rs 4,716 crore a year ago. On the other hand, Bharti Airtel’s consolidated Q4 revenue came in at Rs 37,599 crore, with its net profit of Rs 2,072 crore dropping 31.1% compared to a year ago. (With inputs from The Economic Times)

Mobile recharge packs to get more expensive as telcos gear up for another round of tariff hikes: Report

Reliance Jio and Airtel price hike – new plans and how you can save money

French sports retailer <keyword id="19948511" type="General" weightage="20" keywordseo="Decathlon" source="keywords" meta.keywordsubtype="org" meta.entityname="Decathlon" meta.hostid="153" meta.entityid="Decathlon">Decathlon</keyword> on Wednesday said it will <keyword id="19954634" type="General" weightage="20" keywordseo="invest" source="keywords">invest</keyword> 100 million euros (around Rs 933 crore) in <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword>, its one of the fastest growing markets, in the next five years to expand <keyword id="19992513" type="General" weightage="20" keywordseo="retail" source="keywords">retail</keyword> footprint and <keyword id="19914449" type="General" weightage="20" keywordseo="manufacturing" source="keywords">manufacturing</keyword> operations. The company expects its business to become double in next three to five years, said Decathlon India CEO Sankar Chaterjee. The company plans to have a network of 190 stores, having presence in over 90 cities in next 5 years as part of its expansion, he added. Besides, a handful of this would also be spent on enhancing the digital channel as per the omni-channel approach of the company. Decathlon will expand its manufacturing operations and increase sourcing from india for the local market and its global operations. Currently 68 per cent of the goods sold in India are locally produced. Besides, 8 per cent of Decathlon's global product range are also met through India manufacturing. "We are aiming to take the domestic manufacturing for Decathlon India to 85 per cent by 2026," Chaterjee said. Decathlon plans to add 10-15 new stores every year, accelerating online sales and increasing local sourcing as part of expansion. Decathlon Global Chief Retail and Countries Officer Steve Dykes said India now plays an important role for the company. "India is a unique and exciting market with numerous opportunities. We have commitments to accelerate our efforts in india to make societal impact to inspire more and more Indians to play," he said. Dykes further said Decathlon will explore new sales channels as B2B to increase its impact. "We have a potential for India to play more and more and their role in Decathlon research and design and processes, over 2 million people are engaged globally in sports activity with a Decathlon clay app, and we have a big commitment in developing a future talent that comes from India, he said. In March Decathhlon had said India is a "big priority" market and expects it to be among its top five global markets within five years. SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-and-airtel-gained-over-3-million-subscribers-in-june-vi-lost-nearly-a-million/articleshow/112670406.cms">Reliance Jio and Airtel gained over 3 million subscribers in June, Vi lost nearly a million</a> <a href="https://www.businessinsider.in/tech/mobile/news/the-iphone-pro-models-will-be-made-in-india-for-the-first-time-this-year/articleshow/112653019.cms">The iPhone Pro models will be made in India for the first time this year</a> <a href="https://www.businessinsider.in/stock-market/webstories/orient-technologies-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/112646237.cms">Orient Technologies IPO – Price band to risk factors, all you need to know</a>

Decathlon to invest 100 million euros in India in next 5 years to expand retail, manufacturing

New Delhi, Walt <keyword id="19899232" type="General" weightage="20" keywordseo="disney" source="keywords">Disney</keyword> CEO <keyword id="20023956" type="General" weightage="20" keywordseo="bob-iger" source="keywords">Bob Iger</keyword> has said a joint venture with <keyword id="19936674" type="General" weightage="20" keywordseo="reliance" source="keywords">Reliance</keyword> Industries after merging its <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword> business would benefit the company in terms of profit and also "derisk" its business in the Indian market. The merger deal will create a big entity and help it to stay in the market at a "significant level", said Iger at a Morgan Stanley investor conference earlier this week. "We had an opportunity to align with Reliance, which is obviously the company that has done very well there and one that we respect. And in doing so, end up owning part of a bigger media company. And we believe that, that not only should benefit us in terms of the bottom-line, but derisk us as well there," he said. Last month, Walt Disney Co. and Reliance Industries announced signing of binding pacts to merge their media operations in India. Under the deal, Reliance and its affiliates will hold 63.16 per cent and Disney will have 36.84 per cent in the JV, which will create India's leading media company that will house two streaming services and around 120 television channels. "We wanted to stay in India. We made a big investment in India when we purchased the assets of 21st Century Fox. We are one of the biggest media companies in India. But even though it is the most populous country in the world, we felt we want to be there because of that, we also know that there are challenges in that market," he said. Iger said, the merger will create a big entity and help it to stay in the market at a "significant level". "So, it's kind of the best of both worlds. We stay in the market at a significant level. We have a very good partner in Reliance, and we get to have a chance of growing a business and lowering the risk of doing so," he added. The transaction values the joint venture at Rs 70,352 crore (USD 8.5 billion) on a post-money basis, excluding synergies. Billionaire Mukesh Ambani-led Reliance has also agreed to invest at closing Rs 11,500 crore into the joint venture to give it the muscle to fight rivals such as Japan's Sony, and Netflix. Its OTT platform Disney + Hotstar has seen its paid subscriber base decline from around 55 million to 40 million in the first quarter of FY24 because of Reliance's <keyword id="19985346" type="General" weightage="20" keywordseo="jio-cinema" source="keywords">Jio Cinema</keyword> winning exclusive rights for live sports. The combined entity will have the largest OTT subscriber base. Disney + Hotstar was launched in India in 2020, post the acquisition of the entertainment assets of 21st Century Fox at a valuation of USD 71.3 billion, thereby taking over the operations of Star India and Hotstar. It housed entertainment and cinema channels such as StarPlus and StarGold as well as sports channels like Star Sports. While Disney + Hotstar rapidly increased its subscriber base initially with the streaming rights of cricket matches (IPL, World Cup), it lost the bid for the digital streaming rights in 2023-27 cycle, which was won by Reliance-backed Viacom18 for USD 720 billion, 12.92 per cent higher than what Star India had paid on an average per match value. Media ventures of Reliance are currently housed in Network 18, which owns TV18 news channels as well as a plethora of entertainment (under the 'Colors' brand) and sports channels. NW18 also has stakes in moneycontrol.com, bookmyshow and publishes magazines. NW18 owns news channels CNBC/CNNNews. Reliance separately owns a movie production arm - JioStudios, and majority stakes in two listed cable distribution companies, Den and <keyword id="20777796" type="General" weightage="20" keywordseo="hathway" source="keywords">Hathway</keyword>. SEE ALSO:<a href="https://www.businessinsider.in/business/auto/webstories/top-selling-cars-in-india-in-february-2024/slidelist/108323754.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/auto/webstories/top-selling-cars-in-india-in-february-2024/slidelist/108323754.cms" target="_blank">Top selling cars in India in February 2024</a><a href="https://www.businessinsider.in/tech/mobile/news/xiaomi-14-and-xiaomi-14-ultra-with-snapdragon-8-gen-3-launched-in-india/articleshow/108304169.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/xiaomi-14-and-xiaomi-14-ultra-with-snapdragon-8-gen-3-launched-in-india/articleshow/108304169.cms" target="_blank">Xiaomi 14 and Xiaomi 14 Ultra with Snapdragon 8 Gen 3 launched in India</a><a href="https://www.businessinsider.in/business/auto/news/retail-auto-sales-grow-by-13-in-february-but-elevated-inventory-levels-a-concern/articleshow/108289901.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/auto/news/retail-auto-sales-grow-by-13-in-february-but-elevated-inventory-levels-a-concern/articleshow/108289901.cms" target="_blank">Retail auto sales grow by 13% in February, but elevated inventory levels a concern</a>

Merger with Reliance would boost company's profits and reduce risk in India: Disney CEO Bob Iger

<ul><li>Market is not rushing to downgrade <keyword id="17277356" type="General" weightage="90" keywordseo="jio-fin" source="Orion">Jio Fin</keyword> rivals just yet, despite its deep pockets and ability to disrupt.</li><li><keyword id="2003276" type="General" weightage="70" keywordseo="jio" source="Orion">Jio</keyword> Fin’s aggression in the unsecured loan business will decide how badly rivals will be impacted in times to come.</li><li>Given that cost of funds for JFS is expected to be significantly lower than other NBFCs, it can price its offerings much better than rivals in consumer finance. </li></ul> A behemoth was born on Monday with the listing of the financial services business of <keyword id="6355199" type="General" weightage="80" keywordseo="reliance-industries" source="Orion">Reliance Industries</keyword> on the exchanges. With the listing of <keyword id="15323576" type="General" weightage="100" keywordseo="jio-financial-services" source="Orion">Jio Financial Services</keyword>, the obvious question is the impact that this entity will have on other listed financial services players because it will take them head on. The obvious assumption is that companies that currently are in the consumer and MSME lending space will be directly impacted. Jio Fin’s rich parentage and high capital base will be its biggest advantage. The net worth of the newborn is higher than its nearest competitor and this will enable it to build a large loan book much faster. But this may not be enough to win in the marketplace as it is a total novice when it comes to underwriting and execution. The market will closely monitor Jio Fin’s aggression in the consumer finance business before downgrading its competitors. For now, the jury is out. Like all other businesses that Reliance has set foot in, even in financial services the market is expecting two things – scale and mega disruption. The first segment that Jio is set to rock first is the lending space. Jio Financial Services ahead of its listing on 18 August released some details on the structure of the company and businesses it would operate in. Jio Financial Services is not just a systemically important non-banking financial institution but also a core investment company (CIC). The RBI has mandated the conversion of Jio Fin into a CIC and NBFC over the next three months. What this essentially means is that all the other businesses will operate under this holding company as subsidiaries. In time, all the subsidiaries could also be listed. The key businesses that Jio Financial Services will be present include: Reliance Retail Finance, Reliance Retail Insurance Broking, Reliance Payment Solutions, Jio Payments Bank, the Asset Management Company will be a joint venture with Blackrock. Reliance Industrial Investments and Holdings will be the sole beneficiary of the 6.1% stake in Reliance Industries. Jio Information Aggregator Services will pursue the account aggregator business, which is yet to commence. Jio Infrastructure Management Services will offer project management services. The first segment that Jio Fin seeks to aggressively pursue is retail lending. The dominant player in this segment is Bajaj Finance, which offers small ticket loans to consumers to buy consumer durables. This business has been mastered by Bajaj Finance over the last decade and a half by tying up with stores like Vijay Sales and Croma. This is where Jio will strike first. Reliance Retail has over 550 digital stores against 517 stores owned by its two rivals Croma (387 stores) and Vijay Sales (130 stores). In merchant lending, its focus is on financing options for merchants in grocery, digital, fashion and pharma formats. According to Nomura, the focus of its MSME lending business will be better geographic penetration. Jio Fin will seek to meet the borrowing needs of small businesses that often resort to high-interest informal channels for small-ticket loans. The company will enter into secured loans in the medium term. Over a period of time Jio Fin will offer unsecured loans too. Sources in the banking industry believe that the new entrant will disrupt the sector with differentiated and cheaper offerings as it can afford to do it because of its strong capital base. The cost of funds of JFS are expected to be significantly lower than other NBFCs. According to Morgan Stanley, “The consolidated entity is starting with a capital base of Rs 114.1 bn as of March 2023 (Rs 193.5 bn ex-book value of RIL stake). If it were to allocate this capital to the lending business, this would likely result in it being among the largest NBFCs by net worth. While this implies significant capacity to lend, we will need to see the pace and mode of execution (organic/inorganic). Hence, the market will closely watch every move JioFS makes.” While the markets believe that Jio will put technology and analytics at the heart of the business, building data will take time. Also, given the competition in the sector, borrowing by consumers is high and that is also leading to higher delinquencies. Therefore, the franchise that Jio builds will matter more than the scale of the loan book. The other issue that analysts see is the capital base of the new entity. Jio Fin as a consolidated entity has a capital base of Rs 114,100 crore or Rs 1.14 trillion as of March 2023 (Rs19,350 crore ex-book value of RIL stake). According to Nomura, if Jio Fin were to allocate this capital to the lending business, this would likely result in it being among the largest NBFCs by net worth. “While this implies significant capacity to lend, we will need to see the pace and mode of execution (organic/inorganic). Hence, the market will closely watch every move JioFS makes,” the report adds.

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