Ambani’s finance unit posts profit jump in its debut earnings
JIO Financial Services’ quarterly profit doubled in its first set of earnings since it was spun out of Reliance Industries as part of founder-owner Mukesh Ambani’s plans to extend his dominance to India’s finance sector.
The finance unit, which was listed in August, reported a net income of 6.68 billion rupees (S$109.8 million) for the quarter ended Sept 30 versus 3.32 billion rupees in the preceding quarter, according to an exchange filing on Monday (Oct 16). Revenue rose 47 per cent to 6.08 billion rupees compared with the June quarter, it said. Total costs came in at 714.3 million rupees.
Billionaire Ambani is helming the group’s pivot beyond from its oil and petrochemical roots toward more consumer-facing businesses. Asia’s richest person told Reliance shareholders last month that Jio Financial aims to upend India’s US$1.8 trillion financial sector – like he did with the local telecommunications and retail industries – by reaching out to those who are underserved or unbanked in the country of more than 1.4 billion population.
Still, replicating Ambani’s play book of elbowing out competitors in other sectors could prove tougher in finance where competition is intense from banks and various non-bank lenders. Also, lack of banking licence bars Jio Financial from accessing low-cost deposits from savings accounts.
Jio Financial’s shares have slipped 9.7 per cent since its tepid listing on Aug 21. The stock closed at 224.80 rupees a piece on Monday. The earnings were announced after the close of market hours.
Jio Financial has hired veteran banker KV Kamath as its non-executive chairman and announced a partnership with BlackRock to set up an Indian asset management venture. It’s also looking for someone to lead its insurance business, people familiar with the talks told Bloomberg in August.
Ambani envisions a super-app like China’s WeChat, which offers online shopping, video streaming and messaging alongside financial services such as insurance, stock trading, a payment service similar to Google Pay and easy access to loans. BLOOMBERG
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