Informist, Tuesday, Sept. 23, 2025

MUMBAI - JM Financial Ltd. Tuesday said it will disgorge INR 12.24 million and will also pay INR 15.63 million to settle enforcement proceedings by the Securities and Exchange Board of India after an investigation into its actions as a lead manager for the public issue of non-convertible debentures of Piramal Enterprises Ltd. JM Financial said, as part of the settlement, it will also take voluntary debarment from acting as a lead manager in any public issue of debt securities for three months from the date of the settlement order.

Another group company – JM Financial Services Ltd. – will disgorge INR 13.34 million and will pay INR 19.16 million to settle the same case. JM Financial Services will take a voluntary debarment from acting as a distributor in any public issue of debt securities for three months from the date of the settlement order. JM Financial Products Ltd., another group company, will pay INR 4.4 million to settle the same case and will take a voluntary debarment from financing initial public offers for three months from the date of the settlement order, JM Financial Ltd. said.

The settlement was without admitting or denying findings of fact and conclusions of law, JM Financial Ltd. said. The settlement will not have any material impact on the financials or operations of the company, JM Financial Ltd. said.

SEBI had undertaken an investigation of non-convertible debenture issues done in 2023. As part of this investigation, it found that in the NCD issue of Pirmal Enterprises Ltd., for which JM Financial was one of the lead managers, a significant number of individual investors sold the debt securities allotted to them on the day of listing itself, resulting in a sharp decline in retail ownership.

SEBI had passed an interim ex parte order on Mar. 7, 2024 barring JM Financial from taking any new mandates as lead manager to any public issue of debt. On June 20, 2024, SEBI passed a confirmatory order wherein it confirmed that JM Financial will not act as a lead manager in any public issue of debt securities till Mar. 31, 2025 or such other date as it may specify.

The subsequent SEBI investigation found that the non-banking financial company arm of the JM Financial group, JM Financial Products Ltd., had submitted bid applications on behalf of 1,008 applicants, which were also clients of the stockbroker, JM Financial Services Ltd.

SEBI found that JM Financial Products Ltd. bought all 1.13 million NCDs allotted to these 1,008 clients on the date of listing at a price higher than the sale price of such securities by it on the same day, effectively providing a guaranteed exit at profit for these applicants. JM Financial Products later sold these NCDs at a loss. SEBI's case was that all three group entities – JM Financial Ltd., JM Financial Services Ltd., and JM Financial Products Ltd. had engaged in an unfair trade practice by acting together to provide a guaranteed exit at profit to the 1,008 applicants. These 1,008 applicants made a net gain of INR 19.9 million through this transaction, SEBI found.

The SEBI investigation also found that JM Financial Products had provided loans to these applicants at an interest of 10% to purchase the NCD of Piramal Enterprises which carried a coupon rate of 9%, 9.05% and 9.35%. End

Reported by Eshitva Prakash

Edited by Vandana Hingorani

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