Ever since Reliance Industries Ltd announced the listing of its financial services undertaking Jio Financial Services Limited on the stock markets last month, investor interest in the firm has increased manifold. "With secular growth drivers, the Indian financial services sector is poised to undergo a digital transformation. The sector presents a large, under-penetrated, and growing addressable market, especially for retail and small-business-focused product categories. JFSL and its subsidiaries will leverage the technology capability of Reliance and focus on digital delivery of financial products to democratise financial services access for 1.4 billion Indians," said RIL in a stock exchange filing in October. On Tuesday, Macquarie's report on Jio Financial Services had spooked Paytm stock, diving it to its record low, as the global financial services group sees Jio Financial Services becoming India’s fifth largest financial services firm. With investors anticipating a huge disruption for the Noida-headquartered Paytm, the company's shares fell 11 percent on BSE to close trading at Rs 475 apiece. HDFC Bank, State Bank of India, ICICI Bank, and Axis Bank are the four top companies in the business. JFS has significant scope to expand its balance sheet. “Assuming a 6.1 percent stake in Reliance Industries Ltd realised over time, with a Rs 1 trillion net worth JFS could be the 5th largest financial services firm in the country,” said Suresh Ganapathy, Aditya Suresh, and Param Subramanian in the report. The Reliance firm can disrupt the payments business and become a threat to other fintech models, said the report. Jio Financial Services, Macquarie said, has articulated that it plans to launch a consumer and merchant lending business based on proprietary data analytics to complement and supplement the traditional credit bureau-based underwriting. Macquarie said the focus seems to be on consumer and merchant lending, which is the mainstay of NBFCs like Bajaj Finance and fintech firms like Paytm. Disclosure: Mr. Suresh Ganapathy, Analyst certifies he & his associates/relatives do not have any financial interest in the subject company. Macquarie Capital Securities (India) Pvt Ltd is a SEBI-registered Research Analyst.