Shares of AMCs decline on Jio Financial-BlackRock JV news
asset management companies declined on Thursday, a day after Jio Financial Services, part of the Mukesh Ambani-led Reliance Group said it will form a joint venture with U.S.-based BlackRock Inc to launch services in India. HDFC Asset Management, UTI Asset Management and Aditya Birla Sun Life AMC fell between 0.75% and 2%.
«The fear, probably, in the market is that if they (Jio Financial) go the telecom way and do their asset management foray at very low costs, it could create a little bit of heat among the other existing players,» said Amit Kumar Gupta, founder at Fintrekk Capital. Reliance had upended India's telecoms industry when it launched cheap data plans and free calls, triggering a price war in the sector.
«Whether Jio Financial Services and BlackRock will go all passive or all active (funds) or a mix of both remains to be seen.» Jio Financial and Blackrock are targeting an initial investment of $150 million each in the joint venture, Jio Financial said on Wednesday. The announcement follows the recent demerger of Jio Financial Services from Reliance Industries.
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