Mumbai: Reliance Industries Ltd-backed Jio Financial Services on Monday reported a net profit of ₹668.2 crore, doubling from the previous quarter on the back of higher income from operations.
This is the first financial result of the company after it got listed on the stock exchanges on 21 August. Post the demerger of the financial services business of Reliance Industries, Jio Financial Services plans to enter consumer finance, asset management and insurance.
The company's total revenues stood at ₹608 crore in the September quarter, up 47% from the sequential quarter. While interest income in Q2 was lower than Q1, a dividend income of ₹217 crore in the September quarter propped up total revenues.
The company’s total expenses rose 33% quarter-on-quarter to ₹71 crore, primarily owing to higher employee expenses. The company has started to build a team to run the business. In fact, Reliance’s chairman and managing director Mukesh Ambani said at Reliance’s virtual annual general meeting in August that a “highly motivated leadership team is being built with a combination of financial industry experts and young leaders who are eager to take on big challenges."
On Monday, Jio Financial announced the appointment of former ICICI Bank executive AR Ganesh as group chief technology officer. Ganesh has been associated with ICICI Bank for the past 13 years where his last role was as the chief information security officer (CISO) with an oversight on cybersecurity.
Meanwhile, the company said it is a systemically important, non-deposit taking non-banking financial company (NBFC) registered with the Reserve Bank of India (RBI).
As per its notes to accounts published on Monday, while granting its approval for change in the shareholding pattern and control of the company under the demerger scheme, RBI had asked the company to meet eligibility criteria for a core investment company and apply for conversion to NBFC-CIC. This, RBI has said, must happen within six months of the date of the scheme becoming effective or three months of the date of listing of the equity shares, whichever is earlier.
“The holding company (Jio Financial Services) is in the process of filling for the same," it said.
As per RBI, a core investment company is an NBFC engaged in acquisition of shares and securities and holds not less than 90% of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies.
Although many expect Jio Financial to disrupt the financial services space, some believe it would not be easy to replicate its earlier success in the telecom space. Given that the financial services space is more tightly regulated and established players like banks, non-banks and insurance players have established on-ground presence over years, there is competition abound.
Mukesh Ambani had said in August that for tens of thousands of small businesses, merchants, and self-employed entrepreneurs, ease of doing business must mean ease in borrowing, investments, and payment solutions. Jio Financial Services, he said, plans to democratise financial services for 1.42 billion Indians, giving them access to simple, affordable, innovative, and intuitive products and services.
Shares of Jio Financial Services on BSE ended at ₹224.85 apiece on Monday, up 0.27% from the previous close.
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Updated: 16 Oct 2023, 07:31 PM IST
Jio Financial Services profit doubles sequentially to ₹668.2 crore in Q2 on higher income | Mint - Mint
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