JM Financial shares settle nearly 11% lower; mcap dips Rs 979 crore
It plummeted 19.95 per cent to hit the lower circuit limit of Rs 76.40 on the NSE. Shares of the company ended at Rs 85.50, lower by 10.42 per cent.
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NEW DELHI: Shares of JM Financial on Wednesday ended nearly 11 per cent lower after the Reserve Bank imposed restrictions on group firm JM Financial Products Ltd after finding that the company indulged in various manipulations.
The stock tumbled 19.99 per cent to Rs 76.43 - its lower circuit limit - during the day on the BSE.
It later recovered some of the early lost ground and ended at Rs 85.28, down 10.73 per cent.
It plummeted 19.95 per cent to hit the lower circuit limit of Rs 76.40 on the NSE. Shares of the company ended at Rs 85.50, lower by 10.42 per cent. The company’s market capitalisation (mcap) declined Rs 979.03 crore to Rs 8,149.13 crore. The Reserve Bank on Tuesday imposed restrictions on JM Financial Products Ltd after finding that the company indulged in various manipulations, including repeatedly helping a group of its customers to bid for various IPOs by using loaned funds. In a major regulatory action, the central bank has barred the systemically important non-deposit-taking NBFC from providing any kind of financing against shares and debentures, including sanction and disbursal of loans against Initial Public Offering of shares as well as against subscription to debentures.
The restrictions are with immediate effect. Besides directing the entity to “cease and desist “ from financing activities, the RBI said it is separately examining any possible regulatory violations and deficiencies on the part of the banks concerned. JM Financial on Wednesday said it had a “careful and detailed review” of the order imposing restrictions on the company’s financing business and asserted there were “no material deficiencies “ in its loan sanctioning process.
“We also wish to reaffirm that there have been no governance issues whatsoever and we conduct all our business and operational affairs in a bonafide manner. The company shall continue to service its existing customers as advised by the RBI,” a JM Financial spokesperson said.