Bank of America to invest up to US$1.92 billion in India's Jio Credit for 49.9% stake
Bank of America will invest up to US$1.92 billion in Jio Credit, the non-bank lending arm of Jio Financial Services, acquiring a 49.9% stake through a preferential allotment of equity and warrants. The US bank will initially hold 26.5% and can raise its stake to 49.9% upon warrant exercise. Announced Wednesday, the deal provides fresh capital and a partner for Jio's lending business. It follows other foreign investments in India's financial sector, including Emirates NBD's 60% acquisition of RBL Bank.
Bank of America will invest up to US$1.92 billion in Jio Credit, the non-bank lending subsidiary of Jio Financial Services, acquiring a 49.9% stake. The two companies announced on Wednesday that the transaction will be completed through a preferential allotment of equity and warrants. Upon completion, Bank of America will initially hold 26.5% of Jio Credit, which can rise to 49.9% after exercising warrants. Jio Financial Services said the investment will bring new capital and partner support to its non-bank lending business.
This is one of a series of major foreign investments in India's financial services industry in recent times, following Japanese institutions' investment in Shriram Finance and Dubai's Emirates NBD's acquisition of a 60% stake in RBL Bank. In a joint statement, Bank of America and Jio Financial Services said the investment will allow Bank of America to expand its participation in India's fast-growing market while working with a partner with local experience.