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JM Financial rallies over 5% after Rs 770 crore QIP launch

JM Financial rallies over 5% after Rs 770 crore QIP launch

JM Financial rallies over 5% after Rs 770 crore QIP launch
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By Ankit Gohel  Jun 10, 2020 11:54 AM IST (Published)

The share price of JM Financial gained more than 5 percent on Wednesday after the company launched a qualified institutional placement.

The share price of JM Financial gained more than 5 percent on Wednesday after the company launched a qualified institutional placement (QIP) with an indicative issue size of $101.8 million, or up to Rs 770 crore. The QIP has been launched at a floor price of Rs 66.72 per share.

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The stock touched an intra-day high of Rs 74.80 per share after gaining 5.5 percent. At 10:35 am, the stock was trading 3.31 percent higher at 73.25 apiece on the BSE.
The last date for receiving filled-in application forms is June 12 while the credit of shares or settlement date is on or around June 16. Listing and trading of shares will commence on or around June 17.
IDFC Securities is the lead manager for the QIP issue.
In December 2019, the board of JM Financial had approved fundraising up to Rs 850 crore via issuance of securities. The company had received the shareholders' approval in February 2020. It had also approved an increase in the investments by the foreign portfolio investors (FPIs) to 40 percent from 24 percent of the paid-up equity share capital of the company.
A report by Credit Suisse had flagged concerns over the liquidity for NBFCs and the challenges faced by them.
The report stated that NBFC and bond market liquidity challenge now constrains 70 percent of lending capacity. Asset and liability management (ALM) challenges for NBFCs are turning more severe with access to funding differentiated and a six-month moratorium on 30-70 percent of loans.
“Securitisation and the external commercial borrowing (ECB) market that was a large source of liquidity in the past 18 months have also now dried up and balance sheet liquidity is key to avoid default,” the report noted.
Recently, certain banks have announced their fund-raising plans amid the disruption caused by the coronavirus pandemic. In May, Kotak Mahindra Bank launched its QIP of 6.5 crore equity shares. IDFC First Bank Ltd had also raised Rs 2,000 crore via preferential allotment of shares.
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