🔥 Premium AI-powered Stock Picks from InvestingPro Now up to 50% OffCLAIM SALE

JM Financial's Shares Under Pressure As SEBI Puts Curbs On Leading Public Debt Issues

Published 21-06-2024, 09:46 am
© Reuters.  JM Financial\'s Shares Under Pressure As SEBI Puts Curbs On Leading Public Debt Issues
JMSH
-

Benzinga - Shares of JM Financial (NS:JMSH) were dropping on Friday after the Securities and Exchange Board of India (SEBI) placed a halt on the firm taking the lead on public debt issues.

What Happened: JM Financial said it has been directed by SEBI to stop accepting new mandates as a lead manager in public issues of debt securities until March 31, 2025, or until further notice.

SEBI’s order restricts JM Financial’s role in managing public issues of debt securities but does not affect its involvement in equity instruments or other activities. This action follows an interim order issued by SEBI on March 7, allowing JM Financial to continue in its role for 60 days while an investigation proceeded.

Investigation And Findings: The probe began with SEBI’s routine examination of public issues of non-convertible debentures (NCDs) in 2023. It scrutinised the roles of JM Financial, its brokerage arm JM Financial Services (JMFSL), and its NBFC arm JM Financial Products Limited (JMFPL). The issue in question involved a base size of ₹200 crore with a green shoe option of ₹800 crore, managed by JM Financial.

SEBI found that JMFPL funded investors for the NCD issue and provided them with an exit, incurring a loss. JMFSL facilitated the trades. JMFPL acted as the seller, buyer and re-seller of the NCDs, exploiting its position as the power of attorney holder for many investors. These transactions appeared pre-determined and coordinated to ensure subscription success.

SEBI described the management of subscriptions as “shocking”, indicating market integrity and fair-price discovery were compromised. This order impacts JM Financial’s debt issuance capabilities while its equity activities remain unaffected. The outcome of SEBI’s ongoing probe could lead to further regulatory actions.

Price Action: JM Financial’s share price was down 2.28% at ₹85.32 near the start of trade on Friday.

Read Next: Indian Tech Startups Beat Chinese Counterparts In Funding Rounds In First 6 Months Of 2024, Says Tracxn

Read the original article on Benzinga

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.