Uday Kotak gives big thumbs up to Jio Financial Services, says company can scale under K V Kamath's leadership

Kotak Mahindra Bank CEO Uday Kotak has said that Jio Financial Services (JFS), the demerged financial entity of Mukesh Ambani's Reliance Industries Limited that got listed on August 21, has a significant opportunity to scale under the leadership of veteran banker K V Kamath.

“I believe Jio Financial Services (JFSL) has a significant opportunity to scale. I have no doubt that under the leadership of K V Kamath, it will do a phenomenal job. I have always had the highest regard for Kamath and his ability to envision and execute,” Kotak said at the CNBC-TV18 Banking Transformation Summit on Wednesday.

Shares of JFS opened at Rs 262 in its trading debut on bourses and have fallen 20 per cent in value since. The demerged business of Reliance Industries saw its market capitalisation (m-cap) falling Rs 31,194.62 crore to Rs 1.37 lakh crore from Rs 1.68 lakh crore at the time of listing.

Kotak said under Kamath’s leadership, the financial services company can look at a robust framework.

He added that the importance of a robust structure for managing leverage businesses, underlining the necessity for sound financial practices when providing funds and ensuring their return.

Speaking about the market's competitive nature, Kotak said that it was crucial for Jio Financial Services to operate with precision and foresight. "As long as they follow the mantra, and Kamath knows this at the back of his hand, I have no doubt Jio Financial Services has great potential," he concluded.

Earlier this week, Jio Financial Services chairman Kamath had said that the company would aim to optimise digital opportunities and be a digital first institution.

Speaking at the listing ceremony held at the BSE, Kamath said: “India is in a growth momentum like we have possibly not seen in our history. And it would not be incorrect to say that in the next eight or nine years, we should double our GDP from where it is, to around $8 trillion. That is the India opportunity immediately before us.”

Kamath said the company has an advantage as it can ride on the technological developments already visible and optimise them to the fullest extent.

“Several achievements in the digital field are already visible. Whether it is straight-through processing in the financial sector, real-time transaction enablement, and so on. It is these digital opportunities that every financial player will seek to optimise, and that is what Jio Financial Services would also aim to do,” said Kamath.

in July, Reliance Industries announced its foray into the $540 billion mutual fund industry in India through a 50:50 joint venture with BlackRock, the world’s largest asset management company. Reliance aims to provide affordable and innovative investment solutions to millions of investors in the country.

Jio Financial shares tank 5% for 4th day

Shares of Jio Financial Services (JFS) on Thursday hit lower circuit limit for the fourth day in a row. Earlier this week, JFS shares hit the lower circuit in its maiden trading session after its listing on Monday. The stock was listed at Rs 265 per share, a marginal premium of over 1 per cent over its derived price of Rs 261.85 on July 20.

Following this, JFSL shares hit its lower circuit limits for the second and third consecutive trading sessions on Tuesday and Wednesday. Its shares were locked at 5 per cent lower circuit limit of Rs 227.25 on BSE on August 23.

On Thursday, Jio Financial shares were locked at Rs 215.90 on BSE, down 5 per cent.

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