Bank of America announced on Wednesday it will acquire a stake of up to 49.9% in Jio Credit, the non-bank lending arm of India’s Jio Financial Services. The transaction is valued at 182.68 billion rupees, or approximately $1.92 billion. The move follows a series of recent investments by foreign lenders into the Indian financial sector, which has seen high demand for credit and low delinquency rates.
Jio Credit, a non-banking finance company (NBFC), reported assets under management exceeding $3 billion as of the end of June. The company reached this scale within two years of beginning operations. Jio Financial Services, which listed in 2023 following a demerger from Mukesh Ambani’s Reliance Industries, has pursued a strategy of forming joint ventures with global firms for its various business lines, including asset management and insurance.
Under the terms of the agreement, Bank of America will initially obtain a 26.5% stake through a preferential allotment of equity shares and warrants. The bank will receive shares worth up to 66.13 billion rupees and warrants worth up to 116.55 billion rupees. The total holding may reach 49.9% if all warrants are exercised. Bank of America CEO Brian Moynihan stated that the partnership aims to expand access to financial services by combining the U.S. lender's global reach with Jio Financial's local customer base.
The scale of the investment is significant for the regional financial landscape, valuing Jio Credit at approximately $3.8 billion. The $1.92 billion commitment represents a major entry for a U.S. lender into a market where other international players, such as Japan's MUFG and Dubai's Emirates NBD, have also recently acquired substantial stakes in local firms. Residents in India may notice an increase in digital financial offerings or insurance products as Jio Financial continues its expansion through these global partnerships.
The transaction sets a precedent for how large U.S. banks are navigating India’s financial regulations by utilizing joint ventures rather than wholly-owned subsidiaries. This approach allows foreign firms to share the risks and operational expertise of local partners while gaining exposure to a fast-growing credit market. What happens next depends on the regulatory approval process and the timeline for the exercise of warrants, which will determine when Bank of America’s ownership potentially reaches the 49.9% threshold. As of Wednesday's announcement, specific closing dates for the phases of the investment were not reported.