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Architecting India’s next-gen financial services platform

Leveraging ecosystem synergies, data, distribution and discipline for scalable finance

* Jio Financial Services (JIOFIN) is being architected as a diversified, technologyled financial services platform, aiming to operate across lending, payments, asset management, wealth management, insurance manufacturing and broking, and other digital financial services, while leveraging the unparalleled distribution and data ecosystem of the Reliance group.

* The core investment thesis for JIOFIN centers on its ecosystem-led operating advantage, leveraging Jio’s subscriber base of over 500m and the extensive retail footprint of the Reliance Group. Unlike traditional NBFCs that face high customer acquisition costs, JIOFIN benefits from a lower-cost entry into the daily digital lives of nearly half of India's population. This captive audience enables hyper-personalized credit underwriting through proprietary AI models that analyze data from telecom and retail behavior, providing a unique risk assessment edge, while operating within regulatory guardrails

* JIOFIN’s ‘Reliance Pedigree’ serves as more than just a brand; it provides a structural capital advantage. This was reflected in the recent preferential issue of warrants to the promoter group, which will infuse ~INR157b of equity capital, strengthening the company’s balance sheet and supporting long-term growth. The company enjoys a structurally lower cost of borrowings, with cost of funds (CoF) averaging ~6.99% as of Dec’25, supported by its AAA credit rating and diversified funding access.

* JIOFIN’s diverse product suite is designed to address every stage of a consumer’s financial journey. The lending business, Jio Credit, will remain the primary growth engine, with AUM surging ~5x YoY to over INR190b as of Dec’25. The Payments Bank and payments solution ecosystem will act as a critical acquisition layer, processing trillions in transaction volume and doubling its customer base, thereby providing a steady stream of data to crosssell higher-margin products. Moreover, the company’s wealth and insurance verticals are preparing for a nationwide rollout, targeting Tier 2 and Tier 3 cities, where digital penetration is high but formal credit remains scarce.

* JIOFIN is a structural play on the financialization of India’s digital economy. By successfully shifting its revenue mix, where core business income now accounts for over ~55% of total earnings, JIOFIN has proven its ability to pivot to an operational powerhouse. Its primary strength lies in its triple-threat advantage: an industry-leading liability franchise, a low-cost customer acquisition funnel through itsJio telecom and retail ecosystem, and global financial product manufacturing expertise via the BlackRock and Allianz joint ventures.

* While near-term profitability remains subdued due to the incubation phase of multiple businesses, the groundwork laid across technology, partnerships, and distribution positions the company for scalable growth over the medium to long term. We model consolidated PAT CAGR of 48% over FY26-28E and initiate coverage on JIOFIN with a BUY rating and TP of INR320/share (based on Mar’28E SoTP). Our SoTP does not factor in valuation from businesses, which are still in their incubation phases.

Jio Credit: Lending engine with market leadership ambition

* Jio Credit (JCL) has entered a strong AUM scale-up phase, supported by a secured-led portfolio mix, rapid execution, and a conservative risk framework. Growth has been driven by the swift ramp-up of secured retail products—home loans, LAP, and LAS which provide decent risk-adjusted returns and lower loss volatility during the early stages of balance sheet expansion.

* Alongside retail lending, JCL has gradually expanded its corporate and supplychain finance portfolio, resulting in a more balanced retail-corporate mix and lower concentration risk.

* Asset quality remains a core strategic priority for JCL, particularly as the company focuses on building its portfolio around prime and near-prime customer segments. Given the early stage of portfolio seasoning and the rapid pace of balance sheet expansion, the company has placed strong emphasis on risk management and credit discipline to ensure that growth is sustainable and resilient across cycles. * JCL is in the early stages of expanding its business operations, and return metrics are expected to remain modest in the near term as the company continues to invest meaningfully in its business platform, technology infrastructure, talent base, and product capabilities.

* We expect earnings momentum to strengthen every year, driven by a disciplined scale-up of business and a strong focus on profitability. We expect AUM CAGR of 90% and PAT CAGR of 152% over FY26-FY28E, with an RoA/RoE of 2.4%/12.4% in FY28 (this includes fresh equity infusion by JFSL into Jio Credit in each of FY27 and FY28).

Jio Payments Bank: Building a digital-first, inclusion-led payments franchise

* Jio Payments Bank (JPBL) offers a comprehensive yet focused product suite aligned with the regulatory framework of payments banks. Its offerings include digital savings and salary accounts, UPI services, virtual and physical RuPay debit cards, domestic money remittance, toll processing, and Aadhaar-enabled payment system facilities.

* JPBL’s business model is anchored in a digital-first approach, complemented by a phygital distribution network. As of Dec’25, the bank operated through a network of ~287K BC touchpoints (including both owned and corporate BC). This network plays a critical role in extending banking access to rural and semi-urban areas, enabling account opening, cash-based services, and assisted digital transactions. The JioFinance app serves as the primary customer interface, enabling digital onboarding, account management, payments, and access to banking services with minimal friction.

* Engagement levels continue to rise, reflecting growing adoption of JPBL as a preferred digital payments platform. As of Dec’25, JPBL built a customer base of 3.2m accounts, while deposits stood at INR5.1b. Both metrics have exhibited strong traction, with a rapid scale-up and improving customer acquisition momentum

Jio-BlackRock AMC: Creating a scalable, technology-led AMC platform

* Jio BlackRock AMC (JB AMC) is a joint venture between JIOFIN and BlackRock, combining Jio’s digital distribution scale and customer access with BlackRock’s global investment research, risk management systems, and systematic investing capabilities. The platform is positioned as a differentiated, digital-first entrant in India’s mutual fund industry.

* Within its first year, JB AMC has built meaningful scale by launching a broad suite of low-cost passive, cash management, and select active funds, aligned with the industry’s shift toward digital onboarding, SIP-led investing, and cost-efficient products. With over one million investors onboarded, of whom ~18% are first-time investors, the AMC is tapping into the next wave of retail financialization.

* The long-term thesis is anchored on low customer acquisition costs through the Jio ecosystem, strong product credibility driven by BlackRock’s investment processes, and operating leverage from a gradual mix shift into active and specialized strategies, supporting sustainable AUM and revenue growth.

Jio Insurance Broking: Well-positioned to capture India’s underpenetrated insurance opportunity

* Jio Insurance Broking Limited (JIBL) is a diversified insurance distributor offering life, health, and general insurance products through partnerships with leading insurers. The company operates across D2C, institutional, embedded insurance, and POSP channels, with a clear focus on digital-first journeys supported by limited human intervention to improve scalability and customer experience.

* JIBL is well placed to tap India’s structurally under-penetrated insurance market, where protection gaps remain high across life, health, and SME segments despite rising digital adoption and regulatory support. Increasing product complexity and growing awareness in Tier-2+ markets continue to strengthen the relevance of the broker-led distribution model.

* The company is transitioning from a historically captive, intra-group broker to a market-facing franchise, with a strategic focus on reducing captive business and scaling higher-margin non-captive corporate, SME, and retail segments. This shift, along with operating leverage from digital and POSP-led distribution, is expected to support sustained growth and gradual improvement in profitability over the medium term.

Valuation and view

* JIOFIN represents a long-term platform opportunity in India’s evolving financial services landscape, supported by strong parentage, a robust balance sheet, and access to a large digital and consumer ecosystem.

* Near-term earnings and return metrics are likely to remain constrained as operating franchises are built across lending, asset and wealth management, and payments and insurance (broking and manufacturing). However, parallel scaling of multiple businesses, anchored in digital-first distribution, capital discipline, and selective partnerships, provides meaningful medium-to-longterm optionality.

* JIOFIN offers a compelling long-term growth runway, supported by the breadth of its financial services platform and multiple embedded value-creation levers. While current valuations reflect a part of the medium-term growth potential, we believe they do not fully capture the scale opportunity across lending, asset

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