The US-based asset manager BlackRock is reportedly holding discussions with billionaire Mukesh Ambani’s Jio Financial Services to establish a private credit venture in order to tap into India’s expanding direct lending market.
Private credit JV
BlackRock and Jio Financial Services will each hold 50% stakes in the joint venture (JV), which will lend to a wide range of businesses from large companies to startups, Bloomberg reported Wednesday, citing people familiar with the matter.
A final decision has not been reached yet, but if the two companies decide to move ahead, it would mark BlackRock’s third venture with Ambani’s firm since the two joined hands to initiate asset management and stock broking businesses in India.
Earlier this month, the two companies obtained approval from India’s market regulator to serve as co-sponsors and establish a mutual fund business.
In July, Jio Financial Services received approval from the Reserve Bank of India to transition from a Non-Banking Financial Company (NBFC) to a Core Investment Company (CIC). Ambani’s Reliance Industries spun off Jio Financial Services. Earlier, Ambani’s Reliance Industries Ltd demerged Reliance Strategic Investments Ltd to list Jio Financial Services.
India’s appeal
India has emerged as a key destination for private credit in Asia due to the increased funding needs of local companies. This has prompted global firms like Cerberus Capital Management, Apollo Global Management, and Varde Partners to step up their operations in the country.
Private credit deals in India surged to an all-time high for any six-month period during the first half of 2024, with $6 billion deployed across 96 deals, according to a recent report by Ernst and Young (E&Y). Key sectors for such deals included real estate, infrastructure, and healthcare.
The boost was primarily facilitated by a few “high-value performing and high-yield credit deals,” as Ambani’s Reliance Logistics and Warehousing, Vedanta Semiconductors, and Matrix Pharma collectively raised about $1.3 billion.
Real estate remained a key focus for credit funds, with deployment across large borrowers such as Prestige Group, Puravankara Group, Kalpataru Group, and Shapoorji Group.
Forbes valuation
Ambani, the chairman and managing director at Reliance Industries, has a net worth of $106.5 billion as of October 16, 2024, making him Asia’s richest person and the world’s 11th wealthiest.
