The SEBI probe revealed JMFPL on the very same day sold down the securities, purchased from the retail investors, at a loss. “The applications of a significant number of these retail investors were routed through JM Financial Services Ltd., the stock broker which is part of JM Group, and their applications were funded by JMFPL.”

The probe revealed that JMFPL had the power of attorney to operate the accounts of the investors being funded by them. “...It prima facie appeared that JM group entities were incentivising certain investors to apply for securities in issues managed by JMFL.”

In its interim order in March 2024, SEBI barred JM Financials from taking any new mandate for acting as a lead manager for any public issue of debt securities. The regulator had said the company may continue to act as a lead manager for the public issue of debt securities for 60 days from the date of the order.

JM Financial, in its statement issued on Thursday, says the order, in line with the voluntary undertaking of the company, is limited to the company’s role as a lead manager to the public issue of debt securities and does not relate to other activities of the company, including acting as a lead manager to public issue of equity instruments.

“The Company is committed to co-operate with SEBI for an expeditious resolution of the matter.”

Notably, the Reserve Bank of India in its interim order on March 05, 2024, had also directed JMFPL “to cease and desist, with immediate effect, from doing any form of financing against shares and debentures, including sanction and disbursal of loans against Initial Public Offering (IPO) of shares as well as against subscription to debentures”.

Shares opened a gap down today and slipped to an intra-day low of ₹83.30 on the BSE, taking the company's m-cap down to ₹7,979.20 crore. At the current share price, JM Financial's share is trading 3.2% down compared to its 52-week high of ₹114.95 touched on January 29, 2024.

Public Debt Securities

SEBI bars JM Financial from managing public debt issues till March 2025