Jio Financial Services hit a day high of Rs 263.40 on the NSE after Bank of America agreed to buy up to 49.9% of its lending arm, Jio Credit.

Bank of America and Jio Financial Services have signed a joint venture agreement. Under it, the US lender will invest up to Rs 18,268 crore, close to 1.9 billion dollars, into Jio Credit through a mix of equity shares and warrants.

The structure comes in stages. BofA’s subsidiary, NB Holdings, will first pick up 4.29 crore equity shares for around Rs 6,613 crore, giving it a 26.5% stake in Jio Credit.

It will then subscribe to 7.56 crore warrants worth Rs 11,655 crore, each convertible into a share within 18 months. Once those convert, BofA’s stake rises to 49.9%.

Jio Credit is barely two years old. Even so, it has built assets under management of Rs 30,667 crore as of June 30, mostly by lending to small businesses and retail borrowers, home loan customers among them.

Jio Financial has done this before. It runs a mutual fund and wealth arm with BlackRock, and a separate insurance partnership with Allianz.

Once this deal closes, Jio Credit’s board will carry equal representation from both companies, though the existing management team keeps running day-to-day operations.

Mukesh Ambani called it a ‘strategic partnership’ meant to make credit more accessible across India.

By 09:54 am on Thursday, Jio Financial shares were trading at Rs 259.00 on the NSE, up 1.15% for the day.

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