JM Financial shares decline on D-Street—Here's why

JM Financial share price, JM Financial Sebi order news: JM Financial shares declined on Friday, June 21 after markets regulator Sebi confirmed its interim directions to bar JM Financial from acting as a lead manager for public issues of debt securities until March 31, 2025, in a case of alleged irregularities in a public issue of non-convertible debentures (NCDs). JM Financial shares fell as much as 5.4 per cent to the day's low of Rs 82.53 on BSE in morning deals. The counter closed at Rs 83.75, down 4.04 per cent on NSE.

In a confirmatory order, the market regulator has clarified that the restriction only applies to public issues of debt securities and does not affect JM Financial's other activities, including equity issues.

"The order, in line with the voluntary undertaking of the company, has directed the company to not take any new mandate as lead manager in the public issue of debt securities up to March 31, 2025, or such further date as may be specified by Sebi," JM Financial said.

The confirmatory order followed an interim direction issued by Sebi in March, whereby, it barred JMFL from taking new mandates as a lead manager for public issues of debt securities.
Sebi, prima facie, found that JMFL, as a lead manager, had allegedly irregular practices involving retail investors and associated companies within the JM Group.

It further stated that JM Group entities appeared to incentivise investors to apply for securities in issues managed by JMFL.

The regulator noted that significant NCD allocations were made to retail investors who sold these securities on the listing day. The primary buyer was JM Financial Products Limited (JMFPL), a JM Group NBFC. JMFPL then sold these securities at a loss.

Further, many retail investor applications were funded by JMFPL through JM Financial Services Ltd, with JMFPL holding power of attorney over these accounts.

(With PTI inputs)

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