BofA to take 49.9% stake in Jio Credit for $1.9 billion in India push

The transaction, which values Jio Credit at around $3.8 billion according to a Reuters calculation, initially gives BofA a 26.5% stake, with its holding potentially rising to 49.9% after the exercise of the warrants.

Jio Credit will issue shares worth up to 66.13 billion rupees and warrants worth up to 116.55 billion rupees to BofA as part of the deal.

Bank of America will acquire as much as a 49.9% stake in the non-bank lending arm of Jio Financial Services in a 182.68 billion rupees ($1.92 billion) deal, as the U.S. lender expands its presence in India's growing financial sector.

The two companies said on Wednesday that Bank of America will become a joint venture partner in non-banking finance company Jio Credit through a preferential allotment of equity shares and warrants.

The transaction is the latest big investment in India's financial services by foreign companies, including Japan's MUFG investment in Shriram Finance and Dubai-based bank Emirates NBD's acquisition of a 60% stake in lender RBL Bank.

Jio Credit is among India's fastest-growing NBFCs, with assets under management of more than $3 billion as of June-end, within just two years of operations.