India's asset managers slip on Jio Financial-BlackRock JV news

Aditya Birla Sun Life Amc

27/07/2023 10:22

By Bharath Rajeswaran
       BENGALURU, July 27 (Reuters) - Shares of asset
management companies declined on Thursday, a day after Jio
Financial Services  JIOF.NS , part of the Mukesh Ambani-led
Reliance Group said it will form a joint venture with U.S.-based
BlackRock Inc  BLK.N  to launch services in India.
    HDFC Asset Management  HDFA.NS , UTI Asset Management
 UTIA.NS  and Aditya Birla Sun Life AMC  ADIE.NS  fell between
0.75% and 2%.
    "The fear, probably, in the market is that if they (Jio
Financial) go the telecom way and do their asset management
foray at very low costs, it could create a little bit of heat
among the other existing players," said Amit Kumar Gupta,
founder at Fintrekk Capital. 
    Reliance had upended India's telecoms industry when it
launched cheap data plans and free calls, triggering a price war
in the sector.  
    "Whether Jio Financial Services and BlackRock will go all
passive or all active (funds) or a mix of both remains to be
seen." 
    Jio Financial and Blackrock are targeting an initial
investment of $150 million each in the joint venture, Jio
Financial said on Wednesday. The announcement follows the recent
demerger of Jio Financial Services from Reliance Industries
 RELI.NS .
    The JV with Jio Financial Services will be BlackRock's
second attempt to enter the asset management industry in India,
after exiting a JV with local financial firm DSP Group in 2018.

 (Reporting by Bharath Rajeswaran in Bengaluru; Editing by
Nivedita Bhattacharjee)
 ((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))