After RBI, SEBI took major action on JM Financial, banned from becoming lead manager in IPO-debt issue.

SEBI Acts Against JM Financial: After RBI, stock market regulator SEBI has also taken major action against JM Financial. SEBI has decided to ban JM Financial from acting as lead manager of any IPO. This is currently an interim order of SEBI. Two days ago, on Tuesday, March 5, RBI had banned giving loans against shares and debentures of JM Financial Products Limited, after which this action has been taken by SEBI."text-align: justify;"Giving information about this action, SEBI said that SEBI has decided to conduct routine investigation of public issue of non-convertible debentures in 2023. During this investigation, SEBI found that in the case of an NCD issue, investors who were allotted securities sold them on the day of listing. The holding pattern of securities revealed that a large number of securities were sold, after which there was a huge decline in retail holdings, which was surprising. 

According to SEBI, AK Capital Services, JM Financial Limited, Nuvama Wealth Management and Trust Investment Advisors were the lead managers of this issue. Scrutiny of the transactions on the day of listing revealed that the subsidiary of JM Financial Products Limited, to which the notice was issued, acted as the counterparty to the trades of these investors and provided funds to these investors for investment in NCDs. Had it done. In any issue in which JM Financial is acting as the lead manager, he will be allowed to act as the lead manager for 60 days after this order of SEBI. 

RBI also found in the investigation conducted against JM Financial Products that the company provides funding to a specific group of customers by giving loans to apply for IPO and NCD offering. And this loan was being given on low margin. By taking power of attorney from these customers, the company was operating subscription applications, demat accounts and bank accounts.

RBI has also decided to ban JM Financial Products Limited from giving loans against shares and debentures and has also decided to stop giving loans for subscription of shares or debentures in IPO. RBI said that many types of flaws have been found in the loan granting process of JM Financial Products. Along with violation of regulatory rules, there is also a serious issue of governance. After this decision of RBI, there was a big fall in the shares of JM Financial.  

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