Jio Financial Services Ltd (JFS) saw a significant rise in its shares, increasing by more than 15% on Monday. Reports suggest that the company, owned by Mukesh Ambani, is a top contender to acquire Paytm’s wallet business, which is currently facing challenges.
Current Market Situation
As of 2:22 pm, JFS shares were up by 15.80% at Rs 293.90 on the National Stock Exchange (NSE). In contrast, Paytm shares were locked at a 10% lower circuit limit, experiencing a 43% decline in three trading sessions due to regulatory challenges. HDFC Bank and Jio Financial Services are reportedly leading the race for the acquisition, as per Hindu Business Line.
About Jio Financial Services
Jio Financial Services operates as a holding company with a joint venture called Jio Payments Bank. It provides financial services through subsidiaries such as Jio Insurance Broking (JIBL), Jio Payment Solutions (JPSL), and Jio Finance (JFL).
Potential Acquisition and Mutual Fund Activities
HDFC Bank and Jio Financial Services are said to be the frontrunners for acquiring Paytm’s wallet business. JFS has applied for approval to conduct mutual fund activities in collaboration with BlackRock Financial Management, with an initial joint investment plan of $150 million each.
Challenges Faced by Paytm
Paytm is currently dealing with challenges, including RBI restrictions on its payments bank activities and reports of an Enforcement Directorate investigation into alleged money laundering. Despite this, Paytm denies any ED investigation against the company or its founder. The company is taking steps to migrate its operations from Paytm Payments Bank to external banks.