JM Financial Limited and its subsidiaries have reached a settlement with the Securities and Exchange Board of India (SEBI) over alleged irregularities in managing Piramal Enterprises' public Non-Convertible Debenture (NCD) issue. The settlement, totaling ₹3.92 crore, involves three entities of the JM Financial Group.

Settlement Details

JM Financial Limited, JM Financial Services Limited, and JM Financial Products Limited have agreed to pay the following amounts:

Allegations and Scheme

SEBI's investigation revealed that JM Financial Products Limited (JMFPL) allegedly provided loans at 10% interest to 1,008 applicants to purchase NCDs with lower coupon rates of 9-9.35%. The scheme involved 11.34 lakh NCDs, with JMFPL subsequently buying back the NCDs at predetermined higher prices on the listing day, providing guaranteed profits to the applicants.

The JM Financial Group entities are alleged to have generated ₹1.99 crore in net gains through shared commissions and incentives from the issuer.

Voluntary Debarments

As part of the settlement, the companies have accepted voluntary debarments from various debt securities activities:

• JM Financial Limited: Debarred from acting as a lead manager in any public issue of debt securities for three months from the date of the settlement order.
• JM Financial Services Limited: Debarred from acting as a distributor in any public issue of debt securities for three months.
• JM Financial Products Limited: Debarred from undertaking initial public offer financing for three months.

Settlement Terms

The settlement was reached without the entities admitting or denying the violations. SEBI has stated that it will not initiate any enforcement action against the applicants for the said violations, subject to compliance with the settlement terms.

Impact on JM Financial Limited

According to the company's disclosure, there is no material impact on the financial, operational, or other activities of JM Financial Limited pursuant to the settlement order.

The settlement order, while resolving the immediate regulatory concerns, underscores the importance of maintaining strict compliance with securities regulations in the management of public issues. It also highlights SEBI's ongoing efforts to ensure fair practices in the securities market.

Investors and market participants will likely monitor JM Financial Group's activities closely in the coming months, particularly as the entities serve out their voluntary debarment periods in their respective areas of operation.

JM Financial , a leading integrated financial services group, has announced ambitious growth plans for its alternatives business alongside robust financial results for the first quarter.

Expansion in Alternatives Business

JM Financial has set an aggressive target to achieve assets under management (AUM) exceeding ₹25,000 crore for its alternatives business. This strategic move underscores the company's commitment to expanding its footprint in the high-growth alternative investment sector.

Retail Mortgages and Capital Markets Growth

The company is also focusing on expanding its retail mortgages and capital markets operations. JM Financial plans to leverage its strong balance sheet and digital strategy to drive sustainable growth across these business segments.

Q1 Financial Highlights

JM Financial reported impressive financial results for Q1:

• Consolidated Profit After Tax (PAT) surged by 166% year-on-year to ₹454.00 crore.
• Net revenue increased by 22% to ₹779.00 crore.
• Pre-Provisioning Operating Profit (PPoP) grew by 22% to ₹389.00 crore.
• The company's networth crossed ₹10,000 crore, with book value per share reaching ₹106.40.

Segment Performance

Key Business Developments

• JM Financial ranked #1 in Equity Capital Markets with 10 marquee transactions in Q1.
• The company has a strong pipeline of 45 filed IPO transactions aggregating to approximately ₹100,000 crore.
• Wealth Management AUM increased by 7% YoY to ₹114,228 crore.
• Mutual Fund AUM grew by 49% YoY to ₹13,901 crore.
• Affordable Home Loans AUM rose by 29% YoY to ₹2,911 crore.

Management Commentary

Vishal Kampani, Vice Chairman and Managing Director of JM Financial Limited, stated, "We are extremely excited by the strong momentum across all our business verticals. Our performance is backed by decisive execution, be it in attracting top talent, adding marquee clients, or expanding our physical and digital presence. The transaction pipeline remains robust across businesses, reflecting our deep market engagement."

JM Financial's strategic focus on high-growth areas, coupled with its strong financial performance, positions the company well for continued success in the evolving financial services landscape.