JM Financial shares jumped 6% as the RBI lifted curbs on its non-banking unit

New Delhi: JM Financial shares rose 6.3% to a new 52-week high of Rs 168.70 on the BSE after the Reserve Bank of India lifted restrictions on its subsidiary, JM Financial Products. These restrictions had previously barred the subsidiary from providing funding for shares and bonds due to regulatory and governance issues. JM Financial announced that the RBI, in a letter dated October 18, 2024, has lifted the restrictions imposed on its subsidiary, JM Financial Products Ltd, which were initially enforced on March 5, 2024.

The restrictions, lasting over ten months, were reviewed after a special audit by the RBI, which required rectification of identified deficiencies. JM Financial affirmed its commitment to maintaining high compliance standards and ensuring that the implemented corrective measures are upheld.

The RBI had previously ordered JM Financial Products to stop financing against shares and debentures, including loans for IPOs and debenture subscriptions. With the restrictions now lifted, the company can resume these activities.

JM Financial Products, a systemically important non-banking finance company (NBFC) registered with the RBI and 99.71% owned by JM Financial Ltd, focuses on capital market, bespoke, and real estate financing.

The RBI had imposed restrictions due to serious deficiencies in loans sanctioned for IPO financing and non-convertible debenture subscriptions. As of the third quarter of FY24, JM Financial Products reported a loan book of Rs 4,600 crore and assets under management of Rs 7,197 crore.The stock has risen 60% in 2024 and delivered a 97% return to investors over the past year.