The entry of large player JioBlackRock Asset Management into the mutual fund business is expected to widen the market reach and attract more investors from the smaller cities though the long term success of the fund house will depend on its ability to deliver better return to investors.
Capital market regulator SEBI has given permission to Reliance Industries-owned Jio Financial Services and the American multi-national investment management company BlackRock to enter the mutual fund business in six months.
The combination of Reliance Jio’s vast digital reach with BlackRock’s global investment expertise, the joint venture will democratise investment opportunities by attracting first-time retail investors.
The competition in the MF industry has intensified with the entry of new players especially after SEBI eased the entry barriers to allow more players to enter asset management business and attract new investors from smaller cities.
In last one year, the asset under MF industry increased 23 per cent to ₹70 lakh crore while the value of assets held by individual investors in MFs increased 21 per cent to ₹42 lakh crore.
In fact, it will be a re-entry after 7 years for BlackRock into the Indian MF business after it sold 40 per cent stake in DSP MF.
Tanmay Shah, MD, stock broking firm SIHL said the entry of Jio BlackRock into the asset management business marks a potentially disruptive shift, given the fact that MF penetration is still low.
However, he said challenges remain in building investors trust, navigating regulatory requirements and competing with well-established AMCs.
On the distribution side, AMFI last year granted execution-only platform license to Jio Payment Bank, a subsidiary of Jio Financial Services. EOP is a digital or online platform, which facilitates MF transactions such as subscription, redemption and switch transactions.
Sunil Subramaniam, CEO of independent think-tank Sense and Simplicity said JioBlackRock will try to target becoming the largest player in the passives space by launching multiple factor-based passive funds which tweak an index to generate higher alpha and attract investment from large institutional investors like provident funds and family offices.
By bringing in variation in the passive categories, the fund house may be able to charge a slightly higher fee. Using Jio’s marketing muscle it will try to protect its margins by going direct to customers, he said.
With Jio Financial focusing on marketing and customer acquisition, and BlackRock bringing in its global expertise in passives, JioBlackRock MF will attempt to disrupt the market and achieve scale in the shortest possible time, he added.
The fund will also open an office in GIFT City to channel inward and outbound foreign investments to take advantage of Blackrock’s Global expertise, said Subramaniam.
Published on May 29, 2025