RBI Lifts Restrictions On JM Financial Products For Financing Against Shares, Debentures

JM Financial announced on Friday that the Reserve Bank of India (RBI) has lifted the restrictions imposed on its subsidiary, JM Financial Products (JMFPL), regarding financing against shares and debentures.

In a regulatory filing, JM Financial stated, "We wish to inform you that the RBI, vide its letter dated October 18, 2024, has lifted the restrictions imposed by it on the company (JM Financial Products Ltd) through its order dated March 5, 2024." The company can now resume providing financing against shares and debentures, effective immediately, in compliance with applicable laws and regulations.

The restrictions were originally imposed by the RBI in March 2024, preventing JMFPL from extending loans against shares and debentures, including the sanction and disbursal of loans for Initial Public Offerings (IPOs).

Following the announcement, JM Financial Ltd saw a positive market response, with its stock rising by 1.76 per cent to Rs 158.69 on the National Stock Exchange.

This regulatory development restores JMFPL's ability to offer critical financing services in the capital markets, which are essential for both retail and institutional investors, particularly for IPO financing. The move is expected to have a favourable impact on the company's business operations moving forward.