Breakingviews - Ambani’s finance unit gets credit before it’s due

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Mukesh Ambani’s capacity to disrupt India’s $2 trillion small loans market is fully priced in. The tycoon’s $230 billion Reliance Industries spun off its fledgling financial services unit on Thursday, and investors promptly bid up its value in a special trading session prior to its full listing, handing it a greater-than-expected market capitalisation of $20 billion.

At present, Jio Financial consists of little more than a 6% stake in its parent, which would have cost 173 rupees at Wednesday’s closing price, compared to the 262 rupees investors ascribed to the spun-off entity. It’s a, considering the lending company starts with a tiny $244 million loan portfolio as of March 2022.

Ambani will have his task cut out to deliver on expectations, despite a reputation for upending industries from telecoms to retail. He’s up against consumer lending champion Bajaj Finance

 

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