The Securities and Exchange Board of India (SEBI) has settled a case involving three entities from the JM Financial group concerning alleged irregularities in the management of Piramal Enterprises’ public issue of non-convertible debentures (NCDs).
The three entities—JM Financial Ltd (JMFL), JM Financial Services Ltd (JMFSL), and JM Financial Products Ltd (JMFPL)—have collectively agreed to pay ₹3.92 crore to close the matter. As part of the settlement, JMFL and JMFSL will disgorge alleged unlawful gains amounting to ₹1.22 crore and ₹1.33 crore, respectively, according to SEBI’s order dated September 19.
Furthermore, JMFL will observe a voluntary three-month ban from acting as a manager for public issues of debt securities. Similarly, JMFSL is prohibited from functioning as a distributor for these issues during the same period, while JMFPL will refrain from engaging in IPO financing activities for three months.
The issues date back to the public offering of NCDs in 2023. SEBI noted that many retail investors sold their allotments of Piramal Enterprises’ NCDs on their listing day, leading to a significant drop in retail ownership.
In March of the previous year, SEBI issued an interim order against JMFL, prohibiting it from acquiring new mandates as a lead manager for debt offerings. This order was upheld on June 20 and will restrict JMFL’s activities until March 31, 2025.
An investigation later revealed that JMFPL allegedly created a scheme using a Power of Attorney to submit bid applications for 11.34 lakh NCDs on behalf of 1,008 clients, all affiliated with JMFSL. JMFPL financed these applications through loans with a 10% interest rate. After allotment, it repurchased the NCDs from the investors at a predetermined price, offering them a risk-free profit.
SEBI alleged that the group entities collaborated to ensure a “guaranteed exit with profits” for the applicants, resulting in a combined net gain of nearly ₹1.99 crore.
With the settlement payments made, SEBI stated, “any proceedings that may be initiated for the violations… are settled in respect of the applicants.” The regulator clarified that the involved entities resolved the issue “by neither admitting nor denying the findings.”
Published on September 23, 2025.
