RBI Approves Conversion of Jio Financial Services from NBFC to CIC

The Reserve Bank of India has given its approval for Jio Financial Services, the demerged entity of Reliance Industries Ltd, to convert from a Non-Banking Financial Company (NBFC) to a Core Investment Company (CIC). This move comes after Jio Financial Services submitted an application to the RBI in November 2023 for the conversion.

The regulator had mandated the conversion as part of the approval for the change in the shareholding pattern and control of the company following the demerger of the financial services business from RIL. Jio Financial Services made its official debut on the stock exchange on August 21, 2023, and its shares surged more than 1.5 percent during the opening session on Friday.

As a CIC, Jio Financial Services will now focus on investments in and the management of its subsidiary companies. The transition to a CIC structure will allow the company to delineate the financials and operations of each subsidiary, providing better value discovery for investors.

Unlike NBFCs, CICs are non-deposit taking financial companies that primarily invest in equity shares, preference shares, or debt instruments of their group companies. This shift will give Jio Financial Services greater operational flexibility to focus on core investment activities without engaging in other financial services.

With this approval from the RBI, Jio Financial Services can now explore different sectors and diversify its investment portfolio, adapting to changing market conditions. This move marks a significant step in the company’s evolution and growth as a key player in the financial services sector.