Jio Financial Services Gets RBI Nod to Become Core Investment Company

Jio Financial Services has received approval from the Reserve Bank of India (RBI) to transition from a Non-Banking Financial Company (NBFC) to a Core Investment Company (CIC). Following this announcement, the company’s shares saw an increase of over 2% on the NSE.

Key Developments

RBI Approval

Jio Financial Services applied to the RBI in November 2023 to convert its status to a CIC. The approval allows the company to consolidate its business verticals, including lending, asset management, and insurance, into separate subsidiaries under the CIC structure.

Stock Market Reaction

The stock opened higher at ₹354.5 per share on the NSE, hitting an intraday high of ₹356.04, and later traded at ₹351 per share, marking a 0.99% increase.

CIC Structure

A CIC is primarily responsible for overseeing the shares and securities of its group companies. It must hold at least 90% of its net assets in investments such as bonds, debentures, equity shares, and loans to group companies, with an asset size of at least ₹100 crore.

Operational Benefits

The transition to a CIC allows Jio Financial Services to efficiently allocate capital among its subsidiaries, improve value discovery for investors, and better align with regulatory frameworks. This structure offers greater operational flexibility, enabling the company to focus on core investment activities and adapt to changing market conditions.