JM Financial Shares Plunge 9 Per Cent After SEBI's Disciplinary Action

The stock of the company dropped 8.72 per cent to touch Rs 80.27 per share on the BSE, while it plunged 8.64 per cent to hit Rs 80.35 apiece on the NSE

SEBI barred the firm from taking new mandates to act as a lead manager for the public issue of debt securities after it found the firm in violation of regulatory norms. 

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JM Financial saw its shares plunge in the stock market on Monday. The firm’s shares dropped 9 per cent in the mid-session trade on the first trading day of the week after the Securities and Exchange Board of India placed curbs on the fintech firm for regulatory violations. 

The stock of the company dropped 8.72 per cent to touch Rs 80.27 per share on the BSE, while it plunged 8.64 per cent to hit Rs 80.35 apiece on the NSE, reported PTI. The markets regulator barred the firm from taking new mandates to act as a lead manager for the public issue of debt securities after it found the firm in violation of regulatory norms. 

Notably, last Thursday, the SEBI placed a restriction on JM Financial from accepting any more mandates to lead the public issue of debt securities. However, the regulator in its interim order noted that in the case of existing mandates, the firm can continue to lead as manager for the public issue of debt securities for a period of 60 days.

The order from SEBI follows the disciplinary action taken by the Reserve Bank of India (RBI) against JM Financial Products Ltd from giving any kind of financing against shares and debentures, including sanction and distribution of loans against IPO. 

SEBI conducted a routine investigation of the public issues of Non-Convertible Debentures (NCD) during 2023 and passed the order after the examination. In its probe, it focused on the activities of JM Financial and related entities in a specific debt issue.

After receiving the interim order from the markets regulator, JM Financial issued a regulatory filing and said, “The company shall fully cooperate with Sebi in this investigation.”

As of 1:07 PM, the shares of the firm traded at Rs 79.84 apiece on the BSE, marking a drop of more than 9 per cent.