JM Fin hits 52-wk high as RBI lifts restriction from unit to disburse loans

JM Financial's subsidiary, JM Financial Products can now again offer loans against shares and debentures, according to a brief statement from the financial services group

JM Financial shares climbed 6.3 per cent on the BSE to register a 52-week high of Rs 168.85 per share on Monday, October 21. The stock gained after India's central bank, the Reserve Bank of India (RBI) lifted some restrictions on JM Financial Products, a subsidiary of JM Financial.

At around 10:20 AM, JM Financial shares were up 2.36 per cent at Rs 162.45 per share on the BSE. In comparison, the BSE Sensex was up 0.04 per cent at 81,191.68 around the same time. The market capitalisation of the company around the same time stood at Rs 15,526.22 crore. 

"We wish to inform you that the RBI, vide its letter dated October 18, 2024, has lifted the restrictions imposed by it on the company through its order dated March 5, 2024. With this communication, the company is permitted to provide, with immediate effect, the financing against shares and debentures in compliance with all applicable laws and regulations," the filing read. 

It added: "The company is committed to upholding the highest standards of compliance and will continue to ensure that the remediations carried out by it are sustained."

JM Financial's arm can now again offer loans against shares and debentures, according to a brief statement from the financial services group.

In March 2024, RBI had asked JM Financial Products to stop the sanction and disbursal of loans against Initial Public Offering (IPO) of shares as well as against subscription to debentures.

The RBI had said that this action was necessitated due to certain serious deficiencies observed with respect to loans sanctioned by the company for initial public offer (IPO) financing as well as non-convertible debentures (NCD) subscriptions.

In recent years, RBI has been pursuing regulatory compliance through increased supervision of banks and non-bank financial institutions.

Its latest regulatory action involves four non-banking finance companies, which have come under its scanner due to concerns about their loan pricing practices.

Separately, the Securities and Exchange Board of India had also earlier this year barred JM Financial from accepting new bond issue assignments until March 2025 due to a preliminary investigation into the company and its non-bank finance business.

JM Financial is a financial services company based in India, offering a wide range of services, including investment banking, wealth management, asset management, and financial advisory. The firm caters to individual investors, corporations, and institutions, helping them with services like mergers and acquisitions, public offerings, and financial planning.

In the past one year, JM Financial shares have gained 96 per cent, compared to the BSE Sensex's rise of 26 per cent during the same period.