JM Financial arm raises Rs. 875 crore

Despite all the hue and cry in the market regarding the business of NBFCs, JM Financial's arm  JMFCSL managed to raise Rs. 650 crore from financial investors. 

JM Financial Credit Solutions Limited (JMFCSL), a subsidiary of  JM Financial, entered into an agreement with JM Financial and external financial investors to raise funds of upto Rs. 875 crore. JM Financial has agreed to subscribe up to 89,268 equity shares of JMFCSL. This includes 19,837 partly paid-up equity shares of the face value of Rs. 10 each for upto Rs. 225 crore. 

Former CEO Vikram Pandit, Government of Singapore Investment Corp (GIC) invested about Rs. 430 crore in JMFCSL. Other investors including University of California Endowment fund and Falcon Edge (hedge fund) made up for the rest of the amount of the Rs. 650 crore put in by external financial investors.

As of June 30, JMFCSL's networth was Rs. 1,756 crore, and the fundraising will increase the company's networth by 50 per cent, believes the company. The deal will strengthen its balance sheet to fund for growth requirement. 

JMFCSL has a short-term rating of "A1+" and long-term rating of "AA" from India Ratings and ICRA. The company engages in lending senior secured loans to the commercial real estate sector. 

Meanwhile, the parent company JM Financial Limited was trading at Rs. 87.80 per share, up by 0.23 per cent at 10:03 hours on Friday, when the S&P BSE Sensex was at 36,341.79, up by 17.62 points or 0.05 per cent.