A significant portion of India’s financial landscape is now being acquired by the Non-Banking Financial Company (NBFC) sector. It is not only complementing the traditional financial setups of India but also immensely contributing to the economic growth of the nation, thereby becoming an integral part of the total fiscal ecosystem. The technological and digital payment advancements, bright future prospects, easy penetration capabilities into all the societal levels, rural, semi-urban and urban regions etc. have boosted the NBFCs to function smoothly. Within the NBFC space, the sectors of housing finance, microfinance, and consumer finance have seen a rising trend in financing. The growth trajectory of the NBFCs is facilitated by crucial factors like:

• Financial institutions are seeing a rise in credit requests from a growing middle class.
• Government initiatives for financial empowerment.
• Streamlined regulatory frameworks.

Besides the seasoned players in the market with big market capitalization like Bajaj Finance, IRFC, Chola Investment, Shriram Finance, Bajaj Holdings, Muthoot Finance, Sundaram Finance, L&T Finance, Poonawalla FinCorp, M&M Financial, Tata Investment Corporation, the new-age company Jio Financial Services(JFS) backed by strong and sophisticated digital infrastructure coupled with the fact of being a subsidiary from the house of the Reliance Industries Limited (RIL), JFS can be a game changer in the days to come.

Originally named and incorporated as Reliance Strategic Investments Private Limited in 1999, the company on July 25, 2023 was incorporated again with the name Jio Financial Services(JFS) and got enlisted on the stock exchanges on August 21, 2023. On a broader aspect, the services offered by JFS include loans (personal, consumer durable, merchant trade credit facility), insurance broking, payments bank and payment solutions. These offerings cater to diverse customer segments, from urban professionals to rural entrepreneurs and in order to reach such segments, JFS is using cutting-edge technologies such as artificial intelligence (AI), machine learning (ML), and blockchain to its fullest potential in order to enhance operational efficiency, risk management, and customer experience. Moreover, collaborations with banks, insurance companies, asset management firms, and fintech startups expanded the company’s product reach and customer base greatly since its launch. The company’s initiatives are complemented by its integrated flagship mobile app Jio Money+ which eases financial services, sanctions, transactions and enables users to gain financial insights and encourage cashless transactions in retail, e-commerce, and utility payments.

JFS has a market cap of ₹2,31,577 Cr. but an incredibly high P/E at 700+ (Industry P/E 20.19) due to high street expectations and above 60% surge in less than a year since the listing. The December quarter saw promoters increasing their stakes from 46.77% to 47.12% and mutual funds followed the same suit having increased their holdings to 4.91% from 4.71%. However, the FIIs and DIIs have reduced their portions by 1% in the last quarter. 

On the technical front, the chart pattern suggests a bullish undertone with opportunities of entering the script at every correction. The two most promising formations in the chart are the bullish cup and handle pattern and bullish channel consecutively. The bullish channel has been formed just after the breakout from the cup and handle zone at the 266 level. Since then the price has been trading within the channel and taking support and resistance consistently within the zone until recently when geopolitical tension escalated due to the Iran-Israel war. Even in the crisis, JFS also entered into a pact on 16th April 2024 with BlackRock to set up a wealth management and broking business in collaboration in India which saw the script to react positively among all the red at the exchange.

More importantly, the stock is taking support of all the moving averages including the SMA-44 for the past six months and 50-DMA and 200-DMA since the middle of January after a bullish crossover of both. The RSI is currently just marginally above the neutral zone. Buy on dips is the way to go w.r.t JFS with crucial support at 290, 308 and 330 levels that can be possible entry points.