JM Financial share price falls 8% after SEBI’s decision on new debt issues: Details

JM Financial share price: JM Financial shares fell 8 per cent on March 11 after the Securities and Exchange Board (SEBI) barred the company from taking any new mandate for acting as a lead manager for any public issue of debt securities. Although, SEBI said that JM Financial may continue to act as a lead manager for public issue of debt securities for a period of 60 days. Citing material based on record, the capital markets regulator said that the investigation into the matter would be completed in six months.

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There has been an investigation into the roles of parent company and merchant banker JM Financial’s wholly-owned subsidiary and broker JM Financial Services and subsidiary as well as a non-banking financial corporation JM Financial Products in a debt issue.

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Earlier, the Reserve Bank of India (RBI) stopped JM Financial Products from giving loans against shares and debentures. This included sanction and disbursal of loans against initial public offering of shares with immediate effect, the central bank said.

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The RBI said that the action was taken after observing certain serious deficiencies in the firm’s loan process as it said that were concerns on the governance issues in the company apart from violation of regulatory guidelines.

Since March 5, shares of JM Financial have fallen more than 8 per cent to ₹87.7 apiece on the NSE.

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