JM Financial Says Cannot Ascertain Impact Of SEBI Order On Debt Issue

JM Financial Ltd. said the impact of being barred by the market regulator SEBI to act as lead manager for a debenture issue cannot be ascertained at this point in time.

“The quantifiable financial impact on the company cannot be ascertained at this point in time,” the investment banking major informed exchanges.

Further, SEBI will complete the investigation into the issues within a period of six months, during which JM Financial will fully cooperate with the market regulator, it said.

SEBI ordered JM Financial to stop taking new mandates as a lead manager for public issues of debt securities. For existing mandates, the company is allowed to continue its role for 60 days from the date of the order, according to SEBI’s ex-parte interim order.

The market regulator investigated the non-convertible debenture, which opened on Oct. 19 and closed on Oct. 30. As per the regulator, the base issue size was Rs 200 crore and the greenshoe option was Rs 800 crore. While SEBI did not name the issuer, the details matched with that of Piramal Enterprises Ltd.

“It was observed during the examination that in a particular issue, a significant number of individual investors sold the securities allotted to them on the day of listing itself,” the regulator said in its ex-parte interim order.

SEBI’s crackdown follows the Reserve Bank of India’s order barring JM Financial Products Ltd. from offering finance against shares and debentures with immediate effect.