Financial Statements of Jio Financial Services-

Besides the Rs 152cr in Fees and Commission income, none of the primary business verticals has contributed to the top-line.

Jio Financial Services Income Statement

Breaking down the Income statement

  • Interest Income -The Rs 938 crore is from the interest earned on Fixed Deposits.
  • Dividend Income- Amounting to Rs. 217 crores on 6% stake held in Reliance Industries
  • Fees and commission income-  Rs. 152 crores in FY24 representing fee income from subsidiaries primarily in the Insurance and the payment aggregator businesses. ⇒  Sole component arising from the company’s operating activities
  • Net gain on fair value changes- Resulting out of the treasury activities undertaken by the Company and its
    subsidiaries on certain money market instruments


Valuing Jio Financial Services based on a price-to-earnings (PE) multiple is currently inappropriate. The current PE multiple of 142 is misleading, as the earnings, excluding fees and commission income, do not stem from core operating activities.

The true PE multiple of Jio Financial Services would be – No of shares outstanding = 635.33 cr

  • EPS⇒ 152/635.33 = 0.239246
  • PE⇒ 358/0.239246 =1496.369

So how would one value this company, well currently without any core business model without any core cash flows valuation is not possible but we can certainly put a price.

Currently, Jio Financial Services is trading at a price-to-book (P/B) ratio of 1.63, which we consider slightly elevated. A more conservative entry point for the stock would be at a P/B ratio between 1.4 and 1.5.


With a PB of 1.5 the price of JFS comes out to be 328.52


With a PB of 1.4, the price of JFS comes out to be 306.62

CMP⇒ 358

My Conclusion – Should you buy, hold, or Sell Jio Financial?


Recent News

  • Jio Financial Services In Talks To Acquire Paytm’s Wallet Business.
  • JM Financial predicts Jio Financial Services and Zomato might join the Nifty if added to futures and options. Trent Ltd is also anticipated to be included in the Nifty
  • Jio Financial Services stock hit new high, surging 6.83% after reports of Jio Payments venturing into the soundbox segment
  • Jio Financial Services arm plans Rs 36K crore deal with Reliance Retail.

Amidst such news, the share price of Jio Financial Services has been exhibiting significant volatility hitting the upper circuit on some days and the lower circuit on others. Clearly, a news-based trading pattern has been identified in Jio Financial where no one has a clear picture of what is happening in Jio Financial Services, absolutely no one!


  1. Lending & Leasing- Loans etc
  2. Payments-
  3. Insurance-
  4. Investments-

Our main focus in this article will be on the Payments Business, which we believe will play a key role in Jio Financial’s growth journey.

The Paytm Syndrome-  The all-in-one super app

To know more about Paytm’s payment business model read here –


Jio Financial Services has recently unveiled the beta version of ‘Jio Finance’ app. The app offers UPI and digital banking among others. Currently, the app is in beta version.

Jio’s strategy of offering products across key verticals and acting as a payment aggregator closely mirrors Paytm’s approach,  including obtaining a payments bank license. Upon its debut, the JioFinance app features digital banking services centered around the Jio Payments Bank, along with insurance broking and secured loan offerings, loan against mutual funds.


Unless the RBI implements stringent actions, we believe the payments bank license will be the major contributor to Jio Financial Services’ nonlinear growth. Although Jio Financial Services has various business segments, the revenue generated from its Paytm-like model will drive exponential growth.

The Secret Recipe of Reliance Jio’s Success – Not so Secret anymore

A typical reliance business model is observed in Jio Telecom, Jio Cinema, and now in Jio Financial Services.

  • Infusion of Significant Capital and Strategic Partnerships: Leveraged substantial investments and strategic alliances to build a robust infrastructure and expand its market presence.
  • Aggressive Pricing Strategy: Engaged in a price war by drastically reducing prices, even offering services almost for free to undercut the competition.
  • Market Share Capture: Aimed to dominate the market by driving out competitors through competitive pricing and superior service offerings.
  • Price Adjustment for Profitability: Once a substantial market share is secured, increase the prices to enhance the Return on Invested Capital (ROIC).

With so many established players in the payments aggregator business, why is Jio still pursuing this venture?

The answer is scalability and huge margins.

Before the ban on Paytm Payments banks, the only thing justifying Paytm’s expensive valuations was the business of Payment banks – 

It’s worth noting that in addition to Jio, Adani is also trying to set foot in the digital payment world soon by launching an app called Adani One – The entrance of multiple corporate giants into the payment business world raises the question: why the sudden interest? Well, that’s a story for another day…

Jio vs payment industry

Can Jio pull this another Heist and become a leader again by capturing significant market share? Well, the above image speaks volume. – The $118-billion group has the war chest, management bandwidth, and group synergies to pull it again

Connecting the dots

Typical of Ambani, Jio Financial Services wants the lion’s share of the fast-growing financial services market via organic and inorganic growth—grabbing products, geographies, and licenses. RIL has a history of disrupting established players when it enters a sector. In 2016, it entered the telecom industry with Jio and caused significant disruption through its low-pricing strategy.

While Paytm was told to hit the brakes on the payment business, this situation got us thinking, especially with Jio Financial Services waiting in the wings.

Regulatory action against Paytm Payments Bank Limited (PPBL) was made due to “persistent non-compliances” and “continued material supervisory concerns.

Both these giants are sort of stepping on each other’s toes in a few areas:

  • Digital Payments: Both are big on making payments easy – think UPI, mobile wallets, and online transactions.
  • Banking Services: Paytm’s got its bank, and Jio is likely to offer something similar.
  • Financial Products: From insurance to mutual funds, both seem keen on giving us more ways to manage our money. And of course, Jio Financial Services partnership with Blackrock is not to be ignored.

It’s kinda fishy how Paytm’s facing these hurdles right when Jio’s looking to make a splash. It makes you wonder if it’s just a coincidence.

Paytm vs Jio on a timeline

  • 2015⇒ Paytm receives RBI’s in-principle approval for a payments bank license
  • 2017⇒ Paytm Payments Bank commences operations
  • 2018⇒ RBI bans it from onboarding new users for accounts and wallets and Jio Payments Bank was set up in 2016 but launched in 2018 to offer payment services using UPI linked with your Jio account.
  • 2019⇒ Ban is Lifted
  • 2022⇒ RBI directs the company to stop onboarding new customers and conduct a comprehensive IT systems audit.
  • 2023⇒ Enforcement Directorate raids Paytm’s Bengaluru premises in connection with illegal Chinese lending apps case.
    • Paytm Payments Bank gets final report of RBI-appointed external systems auditor
    • RBI rejects Paytm Payment Services’ payment-aggregator license application
    • RBI imposes Rs 5.4 cr penalty on Paytm Payments Bank for KYC non-compliance
    • Jio Financial Services was listed on the NSE and the BSE on 21st August 2023.
  • 2024⇒National Highways Authority of India bans Paytm Payments Bank from selling Fastags.
    • RBI directs Paytm Payments Bank to terminate nodal accounts by Feb 29, 2024, effectively halting operations.

Now we are aware that Paytm has been dealing with regulatory issues since 2018 due to non-compliance and data leaks to China. However, Paytm has worsened its situation by disregarding continuous warnings from the RBI.

Is there a chance of Jio having some influence, or is it just a coincidence? It seems like we may never know.


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