By Nishit Navin and Jayshree P Upadhyay
Aug 12 (Reuters) – Bank of America will acquire as much as 49.9% stake in the non-bank lending arm of Jio Financial Services in a 182.68 billion rupees ($1.92 billion) deal, as the U.S. lender expands its presence in India’s growing financial sector.
The two companies said on Wednesday that Bank of America will become a joint venture partner in non-banking finance company Jio Credit through a preferential allotment of equity shares and warrants.
The transaction, which values Jio Credit at around $3.8 billion according to a Reuters calculation, initially gives BofA a 26.5% stake, with its holding potentially rising to 49.9% after the exercise of the warrants.
Jio Credit will issue shares worth up to 66.13 billion rupees and warrants worth up to 116.55 billion rupees to BofA as part of the deal.
“By combining Jio Financial Services’ scale, local expertise and customer base with Bank of America’s global reach, digital experience and close to 250 years of leadership in banking, we can help expand access to financial services and support India’s continued economic growth,” BofA CEO Brian Moynihan said.
The deal, which is subject to regulatory approvals, is not a retail banking expansion in India, a BofA spokesperson told Reuters.
The transaction is the latest big investment in India’s financial services by foreign companies, including Japan’s MUFG investment in Shriram Finance and Dubai-based bank Emirates NBD’s acquisition of a 60% stake in lender RBL Bank.
Jio Credit is among India’s fastest-growing NBFCs, with assets under management of more than $3 billion as of June-end, within just two years of operations.
Jio Financial, which listed in 2023 after a demerger from Indian billionaire Mukesh Ambani’s Reliance Industries, operates businesses such as digital lending, payments, insurance broking and asset management services.
The company offers asset and wealth management services through its joint ventures with BlackRock. It has also entered a JV with Germany’s Allianz to offer general and health insurance.
($1 = 95.3300 Indian rupees)
(Reporting by Nishit Navin in Bengaluru; Editing by Abinaya V and Arun Koyyur)
