JM Financial share prices dip by 9% as Sebi restricts handling of new debt public issues

The instruments and Exchange Board of India (Sebi), the capital market regulator, prohibited JM Financial from serving as a lead manager for any future public offering of debt instruments, which caused the share price to drop by more than 9% in early trading on Monday. On the BSE, JM Financial shares fell as much as 9.82%, to ₹79.30 a share.

Following the Reserve Bank of India’s (RBI) fines against one of JM Financial’s group companies and the most recent Sebi order, the company’s shares have dropped more than 17% in the last week. Sebi discovered certain grave errors during JM Financial’s lead management of a specific public matter.

In reference to the current mandates, JM Financial is permitted to serve as a lead manager for the public offering of debt instruments for a period of two months, according to a March 7 Sebi directive. JM Financial now has 21 days to submit its response and objections to the regulator about this matter.

JM Financial stated in an exchange filing, “The company shall fully cooperate with Sebi in this investigation.”

The regulator will look into these problems, and it will take six months to finish.

With immediate effect, the RBI on March 5 prohibited JM Financial Products, one of its other group companies, from offering loans secured by shares and debentures, including the approval and disbursement of loans secured by share IPOs.