JM Financial gains on approval of fund raising plans

The stock of JM Financial traded higher on Friday’s session after its board approved the fund raising plans by the way of issue of equity shares and preferential allotment.

The company, in its press release on stock exchanges, said that it plans to raise Rs 850 crore. It will predominantly a way to issue equity shares and/or any other instruments or securities through qualified institutions placement/private placement/preferential issue/public issue/rights issue or through any other permissible modes and/or a combination thereof.

The Board of Directors of the company at its meeting held on December 19, 2019, also approved the increase of investments by the foreign portfolio investors (FPIs) to 40 per cent from 24 per cent of the paid-up equity share capital of the company.

JM Financials borrowing profile remains strong. As of end of Q2FY20, its long term borrowing constituted nearly 82 per cent of the total borrowings. This included commercial papers, NCDs, and term loans. Its adequacy ratio (CAR) stood at 34 per cent at the end of the quarter.

JM Financial has shown strong recovery since last two months. Since October 2019, the stock has given 20 per cent returns. Its stock price recovered from Rs. 76 to come close to its 52 week high at Rs. 94 on the BSE.

On Friday, at 12.00 am, the stock traded at Rs. 93.75, up by 2 per cent.