Jio Financial Services share price jumps over 16% on report of eying Paytm wallet business
The news that Jio Financial Services (JFS) was one of the first companies to consider purchasing Paytm’s wallet division caused the company’s share price to soar by over 15% to a record high on Monday. On the BSE, Jio Finance shares increased by as much as 16.25%, reaching a new high of ₹295.00 per share. Paytm shares, however, continued to be trapped in its record-low 10% downward circuit.
According to a report by Hindu BusinessLine, One 97 Communications, the parent company of Paytm, was in preliminary discussions to sell the wallet business with a few investors. According to sources cited in the paper, Jio Financial Services and HDFC Bank were reportedly among the front-runners to purchase Paytm’s wallet business.
Following a system audit report and subsequent compliance validation report from external auditors, the Reserve Bank of India (RBI) prohibited Paytm Payments Bank (PPBL) from doing certain operations, causing Paytm shares to plummet.
Reliance Industries, owned by billionaire Mukesh Ambani, has split off its subsidiary Jio Financial Services. The non-banking finance company (NBFC) uses a joint venture called Jio Payments Bank Limited (JPBL) as well as its consumer-facing subsidiaries Jio Finance Limited (JFL), Jio Insurance Broking Limited (JIBL), and Jio Payment Solutions Limited (JPSL) to run its financial services business.
With a joint investment of $300 million, the company established an asset management company in partnership with BlackRock, the largest asset manager in the world. According to Jio Financial Services, “tech-enabled access to affordable, innovative investment solutions for millions of investors in India” would be provided by the joint venture, Jio BlackRock.
For the quarter that ended in December, JFS reported a consolidated net profit of ₹293.82 crore, a 56% decrease from ₹668.18 crore in the corresponding quarter (Q2FY24). Consolidated revenue from operations for the company fell 32% on a sequential basis in Q3FY24, from ₹608.04 crore to ₹413.61 crore.
On August 21 of that year, 2023, JFS demerged from Reliance Industries and debuted on the stock exchanges.
On the BSE, shares of Jio Financial Services were up 15.78% at ₹293.80 a share at 1:50 pm.
