Jio Financial's lending arm is borrowing faster than its capital is growing

Jio Financial Services reported net profit of ₹340 crore for the September 2026 quarter, about half the ₹695 crore it earned a year earlier. Most of that fall is about when one cheque arrived. The group owns shares in Reliance Industries through two subsidiaries and collects a dividend on them once a year; last year it was paid in the second quarter, this year in the first. Over the six months to September, which hold one such dividend in each year, net profit rose 15%, calculated from the filed quarterly results.

The change a holder should weigh sits on the balance sheet instead. Consolidated borrowings were ₹41,325 crore at the end of September, against ₹3,970 crore in March 2025. The debt belongs to the lending arm, Jio Credit, which makes home loans, loans to companies and small businesses, and loans against shares: the company put Jio Credit's own borrowings at a little over ₹42,000 crore.

A lender grows by borrowing several rupees for every rupee of its own capital, and the capital adequacy ratio, which compares that capital with the lender's risk-weighted loans, measures how far the stretch has gone. Jio Credit's ratio was 25.91% in March; at the end of September the company put it at 18.5%. Its debt-to-equity ratio came to about 5.7, calculated from the company's figures, against 3.9 at the end of June. Borrowing also ran ahead of lending within the quarter: Jio Credit's debt rose by about half while the loans it manages grew by about a fifth, both calculated from the company's figures. Management described its capital position as "providing comfortable headroom to support our future growth plans".

The equity behind the whole group moved down as well. Consolidated equity fell ₹4,258 crore between March and September, although the group was profitable over those six months and the company said its promoters had paid in ₹5,934 crore on warrants. Put together, calculated from those figures, more than ₹10,000 crore came out of equity through something other than profit or new capital. One possible source, and only a possibility, is the Reliance stake: Reliance shares were lower at the end of September than at the end of March. None of this makes the group heavily indebted; its borrowings were about a third of its equity, calculated from the filed balance sheet. The strain is concentrated in the subsidiary that does the lending.

That is where the quarter's main announcement lands. Bank of America agreed to buy 49.9% of Jio Credit, a deal the company said would bring about ₹18,000 crore of growth capital and still needs regulatory approval. A first tranche of about ₹9,500 crore would on its own exceed Jio Credit's ₹7,379 crore of equity at the end of September, calculated from the company's figures. The company called the money growth capital and said the first tranche would be invested into Jio Credit; when it arrives depends on regulatory and statutory approvals.