Jio Financial Services seeks shareholder nod for 49% FDI limit

Jio seeks shareholder nod: Jio Financial Services, a subsidiary of Reliance Industries Ltd (RIL), has put forth a proposal to its shareholders seeking approval for raising the foreign direct investment (FDI) limit in the company up to 49 per cent, as per a regulatory filing on Thursday.

The company's agenda includes conducting e-voting by shareholders to endorse foreign investments, including foreign portfolio investments, in the equity share capital of the company up to 49 per cent of the paid-up equity share capital, post-conversion as a Core Investment Company (CIC).

The proposal is contingent upon regulatory clearance, clarified Jio Financial Services in its regulatory filing.

The cut-off date to determine eligible shareholders for voting on the proposal was set as May 17, as per another regulatory filing. The e-voting facility will be accessible from May 24 to June 22.

Jio Financial Services functions as a systemically important non-deposit-taking Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India (RBI).

Additionally, the company seeks approval for modifying the objects clause of its Memorandum of Association.

Under the Consolidated FDI Policy dated October 15, 2020, foreign direct investment in a company engaged in financial services activities regulated by financial sector regulators, including the RBI, is permissible up to 100 per cent under the automatic route. Hence, no explicit approval is required.

However, in accordance with RBI regulations pertaining to changes in shareholding patterns and control, Jio Financial Services has initiated the process for converting the company from an NBFC to a Core Investment Company (CIC), where foreign investment requires government approval.

The company's board, during its meeting on December 27, 2023, had previously sanctioned foreign investments in the equity share capital of the company up to 49 per cent, effective upon its conversion into a CIC.

Furthermore, Jio Financial Services has proposed the appointment of Rama Vedashree as an independent director, subject to approval.

(With PTI inputs)