Why Jio Finance Is Down 40%? What It Means for Long-Term Investors?

Recently, you’ve probably noticed that Jio Financial Services (JIOFIN) has been on a wild ride—and not the fun kind. Since September 2024, this stock has tanked by about 40%, sliding from its peak of Rs.394 all the way down to the Rs.230-260 range as of March 2025. For anyone who jumped in during the hype, that’s a gut punch. But if you’re a long-term investor with a 5-7 year horizon, like I know many of you are, you’re probably wondering, What’s the issue with Jio Finance stock, and should I hold, buy, or run for the hills?

I’ve been digging into this one because, honestly, Jio Finance is too intriguing to ignore. It’s got the Reliance name, big ambitions, and a front-row seat to India’s financial boom. So, let’s declutter the matter together, why it’s falling, what its long-term story looks like, and what you, as a practical investor, should do about it. Grab a coffee, and let’s chat.

Why Is Jio Finance Taking a Beating?

First off, let’s talk about what’s dragging this stock down. I mean, 40% is no small dip, it’s the kind of drop that makes you double-check your portfolio and wonder if you missed a memo.

1. Earnings That Just Won’t Budge
   The latest quarterly numbers from Jio Finance (Q3 FY25, October-December 2024) were a bit of a letdown. Net profit came in at Rs.295 crore, basically flat compared to last year’s Rs.294 crore. Worse, it’s a 57% drop from the Rs.689 crore they posted in Q2. Revenue tanked too, down 37% to Rs.438 crore. Look, I get it, new businesses take time to ramp up, but when you’re a Reliance-backed player, investors expect fireworks, not a flicker. This kind of stagnation spooks the market, and it’s no surprise folks started hitting the sell button.
2. Market Mood Swings
   It’s not just Jio Finance. The broader Indian market, especially midcaps and smallcaps, has been jittery lately. Mixed earnings, global uncertainty, and a dash of profit-taking have soured sentiment since late 2024. Jio Finance, despite its large-cap status, got caught in the crossfire. Technicals aren’t helping either, analysts say it’s trading below key moving averages, and the RSI (Relative Strength Index) is flashing “bearish.” Translation? The stock’s momentum is shot, and traders are piling on the pressure.
3. Big Dreams, Slow Reality
   When Jio Finance debuted in 2023, it came with a hefty price tag, high valuations fueled by Reliance hype and promises of disrupting finance like Jio did telecom. Problem is, it’s still early days. The P/E ratio is hovering around 85-90, which is nuts compared to, say, Bajaj Finance at 32. Investors are paying for a future that’s not here yet, think supply chain financing, wealth management via BlackRock, and a slick digital app. But with profits barely moving and regulatory hurdles in unsecured lending, that future feels further away than expected.
4. No “Wow” Moment
   Jio Finance has cool stuff in the works, 7.4 million monthly active users on its app, a shiny new broking venture with BlackRock (kicked off in January 2025), and AUM (assets under management) jumping from Rs.1,200 crore to Rs.4,200 crore in a year. But none of this has lit a fire under the stock. In a crowded field with giants like HDFC and scrappy fintechs like Paytm, Jio Finance needs a breakout moment to prove it’s not just coasting on the Reliance name.
5. Profit-Taking After the Hype
   Let’s be real, Jio Finance soared 50%+ from its demerger price of Rs.261.85 to a high of Rs.394 in April 2024. That’s a juicy gain, and plenty of early birds cashed out. Post-peak corrections like this aren’t rare, especially when the fundamentals don’t keep pace with the hype. It’s classic market psychology at play.

So, yeah, it’s been a rough six months. But here’s the million-dollar question, Does this dip mean Jio Finance is toast, or is it a chance to snag a future winner at a discount?

Let’s zoom out and look at the bigger picture.

The Long-Term Play: What’s Jio Finance Got Going For It?

Okay, I’m generally too keen for a good underdog story, and Jio Finance has the bones of one, if it can get its act together. Here’s why I think the next 5-7 years could be a different ballgame for this company.

1. The Reliance Superpower
   You don’t mess with the Reliance machine. With over 400 million Jio telecom users and a sprawling retail network, Jio Finance has a built-in audience most companies would kill for. Imagine cross-selling home loans, insurance, or mutual funds to even a fraction of that base. That’s a goldmine waiting to be tapped, especially as India’s digital economy explodes.
2. A Little Bit of Everything
   Jio Finance isn’t putting all its eggs in one basket. It’s got lending (secured stuff like home loans and loans against property), insurance broking, payments via Jio Payments Bank, and now wealth management with BlackRock. Sure, these are baby steps right now, but over 5-7 years? India’s financial services market is set to grow 8-10% annually, and Jio Finance could ride that wave across multiple lanes.
3. Cash to Burn (in a Good Way)
   With a net worth of Rs.25,000 crore, Jio Finance isn’t strapped for cash. As a Core Investment Company (per RBI’s July 2024 tweak), it can leverage that 3-5x—think Rs.75,000-125,000 crore in lending power. That’s serious ammo to scale up high-margin businesses like wealth management or secured loans over the next decade.
4. The BlackRock Bet
   The Jio-BlackRock Broking JV is my favorite wildcard. India’s mutual fund penetration is laughably low, 16% of GDP compared to 60-100% in the US or Europe. With BlackRock’s expertise and Jio Finance reach, this could be a cash cow by 2030. As more Indians start investing beyond fixed deposits, companies like Jio Finance will benefit. It’s a slow burn, but the payoff could be massive.
5. India’s Growth Tailwind
   Let’s not forget the macro stuff. India’s GDP is chugging along at 6-7% a year, and credit demand is only going up, our credit-to-GDP ratio is 60% versus 100%+ in developed markets. Add in Digital India and RBI’s fintech-friendly vibe, and Jio Finance’s digital-first approach fits like a glove.

But, and this is a big but, there are risks. Execution is everything.

Jio Finance’s profit swings (like that Q3 drop) show it’s still finding its footing. The valuation is steep, and competition is brutal, Bajaj Finance isn’t sitting still, and fintechs are nipping at its heels. Plus, regulatory curveballs could slow things down.

It’s got the tools, but can it build the house?

What Should You Do? A Practical Game Plan

Alright, let’s get real. You’ve got a 5-7 year horizon, and you’re eyeing Jio Finance.

Here’s my take, as someone who’s been burned by hype stocks but still loves a calculated bet.

• If You Already Own It: Hold Tight
  At Rs.230-260, you’re sitting on a 33-40% haircut from the peak. Selling now locks in that loss, and I’d argue that’s premature. The long-term story, Reliance’s muscle, BlackRock’s potential, India’s growth, still holds water. Hang on, but keep an eye on quarterly updates. If profits start climbing past Rs.500 crore or AUM hits Rs.10,000 crore, you’ll feel a lot better about sticking around.
• If You’re Thinking of Buying: Dip Your Toes
  This 40% drop could be your entry ticket. I’d start nibbling below Rs.220, maybe even Rs.210 if it dips further. A few analysts suggest Rs.200 as a sweet spot, but the correction’s already shaved off some froth. Don’t go all-in, average your cost over a few months. Think of it like buying a house during a market dip: You’re betting on the neighborhood getting hot later.
• Portfolio Smarts
  Jio Finance is a growth play, not a safety net. Cap it at 5-10% of your portfolio. Pair it with something steady, like HDFC Bank or a solid mutual fund equity scheme, so you’re not sweating every dip. Balance is your friend here.
• What to Watch
  Keep tabs on a few things: AUM growth (is it scaling fast?), profit consistency (no more wild swings, please), and the BlackRock JV (any early wins?). If these click, you could see Rs.400-450 by 2025-26, with more upside by 2030. But if profits stall or competition eats its lunch, it might lag.
• Mindset Check
  This isn’t a quick flip. Jio Finance is a 5+ year story, think of it like planting a tree today that shades you later. You’ll need patience for the ups and downs, but if Reliance pulls off another Jio-style disruption, the wait could be worth it.

Conclusion

Jio Financial Services is at a crossroads.

The 40% drop since September 2024 screams “trouble,” but zoom out, and you see a company with big potential, Reliance’s DNA, a fat wallet, and a front-row seat to India’s financial boom.

It’s not perfect, execution hiccups and a pricey valuation keep me cautious, but for a 5-7 year investor, this could be a diamond in the rough.

Hold if you’ve got it, buy on weakness if you don’t, and stay sharp.

What do you think, bullish on Jio Finance, or waiting for more proof? Drop your thoughts below, I’d love to hear where you’re at with this one.

What I’m doing? Disclaimer: A decent portion of my portfolio has Jio Finance in it, so my views can be biased. My Jio Finance holding is also in deep red, but I’ve averaged it in last few months. As I’ve shared in this blog post, I want to believe the long-term story linked to Jio Finance. But its valuation at PE-85 is really a confidence dampener for the moment. But I think, as Jio Finance starts to capture the market, its PE will come down to 30-40 zone in next 2 years.

Have a happy investing.