Jio Financial Shares Surge 15% Amidst Reports of Interest in Paytm Wallet Business

Jio Financial Services Ltd (JFS) witnessed a significant 14% surge in Monday's trading session following reports indicating that HDFC Bank and the demerged financial services arm of Reliance Industries are leading contenders for the acquisition of Paytm's wallet business under One 97 Communications Ltd. In response to this development, JFS stocks reached a new high, rising by 15.31% to Rs 292.60. Meanwhile, Paytm shares were halted at a 10% lower circuit limit, experiencing a 43% decline over three trading sessions, while HDFC Bank Ltd shares maintained a flat trend.Jio Financial Services is is a holding company, which has a joint venture (JV) namely Jio Payments Bank. It is operating financial services business through consumer-facing subsidiaries such as Jio Insurance Broking (JIBL), Jio Payment Solutions (JPSL) and Jio Finance (JFL).

Earlier today, a report by the Hindu Business Line quoted highly placed sources while suggesting Paytm is in exploratory talks with a few interested investors to sell the wallets business. HDFC Bank and Jio Financial Services are said to be among the forerunners to acquire the same, it reported. JFS also has submitted application for carrying on mutual fund activities along with BlackRock Financial Management, was is consideration for getting an in-principle approval. Jio Financial and BlackRock are targeting to initially invest $150 million each in the joint venture. Paytm shares crashed after the Reserve Bank of India (RBI) barred Paytm Payments Bank (PPBL) from conducting certain operations following a system audit report and subsequent compliance validation report of external auditors. Jio Financial Services is a demerged arm of billionaire Mukesh Ambani-led Reliance Industries. The non-banking finance company (NBFC) operates its financial services business through its consumer-facing subsidiaries, namely Jio Finance Limited (JFL), Jio Insurance Broking Limited (JIBL), and Jio Payment Solutions Limited (JPSL), and a joint venture, namely Jio Payments Bank Limited (JPBL).The company had partnered with the world’s largest asset manager BlackRock to set up an asset management company with a combined investment of $300 million. Jio Financial Services had said that the joint venture, Jio BlackRock, would deliver “tech-enabled access to affordable, innovative investment solutions for millions of investors in India."