JM Financial Shares Surge 6% as RBI Lifts Restrictions on Subsidiary

JM Financial Shares Surge 6% as RBI Lifts Restrictions on Subsidiary

Shares of JM Financial surged 6.3% to a new 52-week high of Rs 168.70 on the BSE after the Reserve Bank of India (RBI) removed restrictions on its subsidiary, JM Financial Products. The subsidiary had been barred from offering financing for shares and bonds due to regulatory violations and governance concerns since March 2024.

In a regulatory filing, JM Financial announced that the RBI had lifted the restrictions as of October 18, 2024, following a special audit that required the rectification of deficiencies. The company expressed its commitment to maintaining high compliance standards and ensuring that the implemented corrections are sustained.

The restrictions, which lasted over ten months, prevented JM Financial Products from financing against shares, debentures, and loans for IPOs and debenture subscriptions. With these lifted, the subsidiary is now able to resume these business activities.

JM Financial Products, a systemically important non-banking finance company (NBFC) registered with the RBI, primarily focuses on capital market financing, bespoke financing, and real estate funding. The subsidiary, which is 99.71% owned by JM Financial Ltd, reported a loan book of Rs 4,600 crore and assets under management of Rs 7,197 crore by the end of the third quarter of FY24.

This development follows a strong year for JM Financial shares, which have risen by 60% in 2024 and delivered a 97% return to investors over the past year.