Jio BlackRock Asset Management’s Plans in India

By Jayshree P Upadhyay and Ira Dugal
MUMBAI (Reuters) – Jio BlackRock (NYSE: BLK) Asset Management plans to introduce nearly a dozen equity and debt funds in India by the year-end, focusing on small-ticket investments and bypassing distributors to reduce costs, according to three people familiar with the firm’s strategy.

The joint venture between Jio Financial Services, supported by billionaire Mukesh Ambani, and BlackRock, is entering India’s 72.2 trillion rupee ($844 billion) funds market with a business structure that aims to shake up the sector, leveraging its extensive digital network to bypass traditional distributors used across the industry.

Jio BlackRock intends to capitalize on Jio, India’s largest telecom network, and BlackRock’s investment management platform, Aladdin, to offer differentiated products in this competitive market, as noted by two of the sources.

The asset manager has applied to the market regulator to launch eight additional funds, in addition to the first three funds it launched last month. The new funds will allow investments as low as 500 rupees ($5.83).

Recently, the asset manager announced it has raised over $2.1 billion across three debt mutual fund schemes, attracting investment from 90 institutional investors and 67,000 retail investors.

Average costs for Jio BlackRock funds are expected to be lower than the industry average, as the firm plans to eliminate distribution costs by dealing directly with investors. Currently, active funds offered through traditional distribution have an average total expense ratio of about 1.78%, with a maximum charge of 2.5% of the investment amount. Direct funds generally reduce costs by approximately 0.5% to 0.6%.

By bypassing dominant distributor channels, Jio BlackRock aims to provide funds directly to institutional and retail investors, significantly reducing fees associated with the funds, according to the sources.

Ambani’s Jio is known for disrupting markets through competitive pricing. Since its launch in 2016, it has become the largest telecom carrier in India, boasting 475 million subscribers by providing mobile phones and affordable voice and data plans.

Jio BlackRock plans to utilize the distribution reach of its partner, targeting the existing 8 million active users of financial services on its digital platforms such as MyJio and Jio Finance, another source revealed.

BlackRock, the world’s largest fund manager, had $11.6 trillion in assets under management as of December 2024. Renowned for its passive funds, which track established indices, BlackRock manages $7.8 trillion in exchange-traded and index funds. However, Jio BlackRock plans to offer a blend of active and passive funds in India, where active funds currently dominate the market.

The passive fund segment has been experiencing growth in India, with passive funds accounting for 12.11 trillion rupees, or 16.78% of total assets as of May, marking a 25% increase from a year earlier.

The fund house aims to leverage Aladdin, an investment and risk management system designed to provide consistent returns. Relevant features of Aladdin will also be available to Jio BlackRock’s investors.

($1 = 85.3730 Indian rupees)