Reliance Industries Chairman Mukesh Ambani-led Jio Financial Services Ltd (JFS) has announced the acquisition of 7.9 crore shares of Jio Payments Bank from the State Bank of India (SBI) for a total consideration of Rs 104.5 crore. This strategic move will transform Jio Payments Bank into a wholly owned subsidiary of Jio Financial Services. Following the announcement, JFS shares surged by nearly four percent, reaching an intraday high of Rs 208 on the Bombay Stock Exchange (BSE).
Jio Financial Services previously held an 82.17 percent stake in Jio Payments Bank, a joint venture between JFS and SBI. With this latest acquisition, Jio Financial now owns 100 percent of the payments bank, making it a fully owned subsidiary. The company confirmed this transaction through an official exchange notification, stating, “The Board of Directors of the company, at its meeting held today, has approved the acquisition of 79 million equity shares of Jio Payments Bank from SBI for an aggregate consideration of Rs 104.54 crore.”
Following the acquisition news, JFS shares experienced a notable increase. On Tuesday, JFS stock closed at Rs 716.15, marking a 3.02 percent rise. This positive market response highlights investor confidence in Jio Financial’s expanding footprint in the financial services sector.
While the acquisition has been approved by the Board of Directors of Jio Financial Services, it remains subject to regulatory approval from the Reserve Bank of India (RBI). The transaction is expected to be completed within 45 days following the necessary regulatory clearances.
JFS has also clarified that this transaction is not a related-party deal, ensuring transparency. Additionally, no promoters or group entities have any financial interest in this acquisition.
Jio Financial Services reported stable financial results for the third quarter ending December 2024. The company recorded a consolidated profit of Rs 295 crore, reflecting a marginal 0.3 percent increase compared to Rs 294 crore in the same quarter of the previous fiscal year. Additionally, its assets under management (AUM) witnessed significant growth, reaching Rs 4,199 crore, up from Rs 1,206 crore in the September quarter of FY25.
The executive committee of the Central Board of Directors at SBI approved the divestment of its entire stake in Jio Payments Bank. The transaction was finalized at a valuation of Rs 13.22 per equity share, totaling Rs 104.5 crore. This acquisition values Jio Payments Bank at approximately Rs 586 crore. SBI’s decision to exit its stake in the payments bank aligns with its strategic financial goals and allows Jio Financial to consolidate its control over the entity.
Jio Payments Bank commenced operations in April 2018 and has successfully built a customer base of 1.89 million CASA (Current Account and Savings Account) customers as of December 2024. With this acquisition, Jio Financial Services aims to further expand its digital banking offerings and financial services ecosystem.
India currently has five operational payments banks, including:
Airtel Payments Bank
Fino Payments Bank
India Post Payments Bank
NSDL Payments Bank
Jio Payments Bank
These banks operate under the regulatory framework established by the RBI and have specific operational restrictions. Payments banks can accept deposits of up to Rs 2 lakh per customer but are not allowed to offer credit services. Additionally, they can establish their branches and appoint business correspondents (BCs) for enhanced access. However, BCs are restricted from conducting offline transactions on behalf of the bank. Unlike traditional banks, payments banks are not required to issue passbooks to customers for their deposit accounts.
Conclusion: A Strategic Move for Jio Financial
The acquisition of SBI’s stake in Jio Payments Bank is a significant step for Jio Financial Services, strengthening its position in India’s financial sector. With complete ownership of Jio Payments Bank, JFS can further integrate digital banking services and expand its market reach. As the company awaits regulatory approvals, investors and stakeholders are optimistic about its future growth in the financial services domain.