Shares of Jio Financial Services soared over 2% on Monday after the company said last week that it had received a letter from the Indian market regulator to set up a mutual fund house in the country.

What Happened: Jio Financial and American investment management firm BlackRock will act as co-sponsors to set up a mutual fund, the company said in a press release on Friday. It has received an in-principle approval from the Securities and Exchange Board of India (SEBI), Jio said in its statement.

“The final approval for registration will be granted by SEBI subject to fulfilment by the company and BlackRock of the requirements set out in the said letter,” the company added.

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Last year, Jio Financial Services and BlackRock announced a partnership to establish Jio BlackRock, a 50:50 joint venture aimed at entering India’s asset management sector. Currently, SBI Mutual Fund, HDFC Mutual Fund and Motilal Oswal Mutual Fund are some of the biggest mutual fund houses in India.

In April, the companies had entered a 50:50 joint venture to set up a wealth management company and incorporate a brokerage company in India. Subsequently in September, it partnered with BlackRock Advisors Singapore to establish a new investment advisory company, Jio BlackRock Investment Advisers.

Jio Financial said it will invest ₹3 crore for the initial subscription of 30 lakh equity shares, each priced at ₹10, in the new business but did not release details of its business plan for the venture.

Price Action: Jio financial’s shares jumped 2.20% to ₹346.25 on Monday morning.

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