Bank of America is set to acquire as much as a 49.9% stake in Jio Financial Services’ non-bank lending business for 182.68 billion rupees ($1.92 billion), strengthening the U.S. bank’s exposure to India’s rapidly expanding financial-services market.
The agreement announced Wednesday will make Bank of America a joint-venture partner in Jio Credit, a non-banking financial company (NBFC) that has expanded rapidly since beginning operations two years ago.
Under the transaction, BofA will initially acquire a 26.5% stake through a preferential allotment of equity shares and warrants. Its ownership could rise to 49.9% if the warrants are fully exercised.
Register for the next Tekedia Mini-MBA.
Register for Tekedia AI in Business Masterclass.
Join Tekedia Capital Syndicate and co-invest in great global startups.
The deal values Jio Credit at about $3.8 billion, based on a Reuters calculation.
Jio Credit will issue up to 66.13 billion rupees of equity shares and up to 116.55 billion rupees of warrants to Bank of America. The transaction remains subject to regulatory approvals.
The investment gives Bank of America access to Jio’s rapidly expanding lending platform and customer base without amounting to a direct expansion of its retail banking operations in India.
A BofA spokesperson told Reuters that the transaction is not a retail banking expansion in the country. Instead, the partnership combines Jio Financial’s domestic distribution and digital infrastructure with BofA’s international financial-services capabilities.
“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 structure is significant because India’s financial sector is increasingly attracting international capital as demand for credit, payments, insurance and investment products grows alongside the country’s expanding economy.
Jio Credit has emerged as one of India’s fastest-growing NBFCs. Its assets under management exceeded $3 billion as of the end of June, only two years after the business began operating. That growth gives BofA exposure to a financial platform that is still in an early expansion phase rather than an established lender with a mature balance sheet.
Jio Financial Services was listed in 2023 following its demerger from billionaire Mukesh Ambani’s Reliance Industries. Since then, the company has expanded beyond lending into several areas of financial services, including digital payments, insurance broking and asset management. Its strategy is built around leveraging the enormous customer ecosystem associated with the broader Reliance group and using digital distribution to scale financial products.
Jio Financial has been pursuing partnerships with major international financial institutions as it develops that ecosystem. The company operates asset and wealth-management ventures with BlackRock, the world’s largest asset manager. It has also established a joint venture with Germany’s Allianz to offer general and health insurance products.
The BofA transaction therefore adds another major global financial institution to Jio Financial’s growing network of international partners.
The deal also comes amid a broader increase in foreign investment in India’s financial sector.
Japanese financial conglomerate MUFG has invested in Shriram Finance, while Dubai-based Emirates NBD has agreed to acquire a 60% stake in RBL Bank.
The interest reflects the scale of India’s financial opportunity. The country’s large population, expanding middle class, growing digital-payment ecosystem, and increasing demand for consumer and business credit have created significant room for financial institutions to expand.
NBFCs are particularly important because they can provide credit to segments of the economy that may not be fully served by traditional banks.
BofA’s investment shows that international banks can participate in India’s financial growth without building a conventional retail banking operation from the ground up. Rather than competing directly for retail deposits and branches, BofA is taking a substantial strategic position in a fast-growing domestic lending platform.
The initial 26.5% ownership gives BofA significant exposure to Jio Credit, while the warrants provide a route to nearly half of the company if exercised.