JM Financial Share price and Fundamental Analysis

Company History

JM Financial Limited was incorporated as a Private Limited Company under the name of 'J.M. Share and Stock Brokers Private Limited' on January 30, 1986 under the Companies Act, 1956. Subsequently, the Company became a deemed Public Limited Company upon its promoter, J. M. Financial & Investment Consultancy Services Private Limited becoming a deemed Public Limited Company on June 15, 1988. On September 15, 2004, the name of the Company was changed to JM Financial Limited, Public Limited Company.

JM Financial Limited is an integrated and diversified financial services group offering a wide range of capital market services to corporate and individual clients. The Company is engaged in holding company activities, advisors in equity and debt capital markets, management of capital markets transactions, mergers & acquisitions, advisory, private equity syndication, corporate finance advisory business and administration & management of private equity funds. Headquartered in Mumbai, it has a presence across 634 locations in 185 Indian cities and 4 international locations through its subsidiaries and a representative office.

During December 1997, the Company entered into a Joint Venture agreement with Morgan Stanley.

During the year 2001, the company redeemed last installment of 14% Debenture and also repaid part of its unsecured loans to its promoters with the ultimate objective of bringing down the borrowing and making the company a Zero Debt Company.

J.M. Securities Private Limited got amalgamated with the Company in year 2006. JM Financial had launched a corporate private equity fund in August of the same year 2006 under the name of JM Financial India Fund, with US-based Old Lane Partners, LP, being the lead investor/co-sponsor to the Fund. As of August 2007, the company had launched a unique Portfolio Management Scheme that aims to offer 100% capital protection as well as potential capital appreciation based on the Dynamic Portfolio Insurance (DPI) methodology. As at March of the year 2008, JM Financial had acquired JM Financial ASK Securities Private Limited. The Company has opened a full-fledged branch at Vizag, the Port City of Andhra Pradesh in the month of September of the same year 2008.

On 3 June 2010, Rand Merchant Bank (RMB), a division of FirstRand Limited (FirstRand) and JM Financial Consultants Private Limited agreed to enter into a strategic co-operation to provide M&A advisory services to Indian and African corporates for their activities in the Indo-Africa corridor. JM Financial Consultants Private Limited is the investment banking division of JM Financial Group. The MoU signed between RMB and JM Financial Consultants will enable corporates at both destinations to explore and leverage opportunities in the economies of India and Africa. According to the MoU, JM Financial and RMB will jointly provide M&A advisory services to Indian clients seeking to make investments into entities or transactions in Africa; and South African and African clients seeking to make investments in entities or transactions in India.

On 20 November 2014, JM Financial Limited announced that it has received a significant capital investment of Rs 540 crore from a global fund led by Mr. Vikram Pandit in its real estate lending subsidiary company, FICS Consultancy Services Limited (FICS). JM Financial Limited has provided additional capital of Rs 360 crore to this business bringing the total capital commitment to Rs 900 crore. The additional capital will enhance the real estate lending and financing business of JM Financial.

The Allotment Committee of the Board of Directors of JM Financial Ltd at its meeting held on 11 December 2014 allotted 1.16 crore equity shares of the face value of Rs 1 each to Mr. Vikram Shankar Pandit, a Non Resident Indian upon the exercise of right by him as a warrant holder.

On 17 August 2015, JM Financial Ltd announced that its Wholly Owned Subsidiary (WOS) JM Financial Institutional Securities Limited has entered into a Memorandum of Understanding with Seabury Corporate Finance LLC, a subsidiary of Seabury Group LLC for strategic co-operation to provide Investment Banking advisory services to Indian corporates for their activities in the Aviation, Aerospace, and Defense business. Under the agreement, JM Financial and Seabury will jointly provide investment banking advisory services to each party's clients who may be seeking investment opportunities or may like to identify suitable strategic partnerships for their respective businesses. Both companies will seek to leverage their client relationships, as well as their regional and domestic expertise in a mutually beneficial manner.

On 9 May 2016, JM Financial Products Limited, a subsidiary of JM Financial Ltd, executed the Agreement to acquire securities representing upto 9.84% (on a fully diluted basis) of the total paid up capital of Fairassets Technologies India Private Limited. Fairassets Technologies India Private Limited is engaged in the business of operating a web portal and mobile application by the name of 'Faircent.com' which provides a virtual peer to peer lending marketplace.

On 30 September 2016, JM Financial Limited announced that JM Financial Asset Reconstruction Company Private Limited has become a subsidiary of the company with effect from 30 September 2016. The shareholding of the company in JM Financial Asset Reconstruction Company has increased from 50% to 50.01%.

On 15 November 2016, JM Financial Products Limited, a subsidiary of JM Financial Limited, acquired 19.93 lakh equity shares of India Home Loan Limited (IHL) representing 17.53% of the total paid up equity share capital of IHL through secondary purchase route. On 2 December 2016, JM Financial Products Limited acquired further 15.05 lakh equity shares of India Home Loan Limited (IHL) through preferential allotment route. After the above acquisition, JM Financial Products Limited holds an aggregate of 34.99 lakh equity shares of IHL representing 24.50% of the total post issue paid up equity share capital of IHL. The acquisition as above by JM Financial Products is with the intention to transfer the entire equity stake in IHL (after factoring the carrying cost for the period it remains in the books of JM Financial Products) to a Fund/Trust to be established and managed/sponsored by JM Financial Investment Managers Limited, the asset management company for Alternative Assets business in the JM Financial Group. IHL is engaged in the business of providing home loans to individuals and families in the affordable housing segment. The equity shares of IHL are currently traded on the BSE Limited.

On 30 March 2017, JM Financial Limited announced that its subsidiary company JM Investment Managers Limited has executed the share purchase agreement to acquire equity shares of Spandana Sphoorty Financial Limited (Spandana) through a secondary purchase in two tranches representing 16.26% of its current outstanding total equity shares. On a fully diluted basis, the said acquisition would result in the holding of 6.41% in Spandana post the preferential issue and exercise of the warrants/ESOPs by the promoters/employees of Spandana as per the other agreements executed by Spandana.

The Board of Directors of JM Financial Asset Management Limited, a subsidiary of JM Financial Limited, at its meeting held on 24 April 2017 approved the buy-back of up to 10% of the outstanding equity capital subject to the necessary approvals as may be required.

The Board of Directors of JM Financial Limited at its meeting held on 2 May 2017 accorded its approval to the Composite Scheme of Amalgamation and Arrangement between the company and its Wholly Owned Subsidiaries, viz., JM Financial Institutional Securities Limited and JM Financial Investment Managers Limited. The Scheme, inter alia, comprises the demerger of the Institutional Equities Division of JM Financial Institutional Securities Limited into a new company proposed to be incorporated as part of this arrangement and merger of JM Financial Institutional Securities Limited and JM Financial Investment Managers Limited into the company.

On 7 July 2017, JM Financial Limited announced that JM Financial Asset Management Limited has completed buy back of 9.95% of its outstanding equity capital. Consequent upon the said buy back, the shareholding of JM Financial Limited in JM Financial Asset Management Limited has increased from 53.21% to 59%.

On 18 July 2017, JM Financial Products Limited, a subsidiary of JM Financial Limited, completed the first leg of acquisition of 24.35 lakh equity shares of Spandana Sphoorty Financial Limited (Spandana), representing 8.56% of the current outstanding total equity shares of Spandana. On a fully diluted basis, the said acquisition would result in the holding of 4.71% in Spandana.

On 1 September 2017, JM Financial Products Limited (JM Financial Products), a subsidiary of the JM Financial Limited, executed the agreement(s) to acquire equity shares/compulsorily convertible securities of Vendiman Private Limited (Vendiman) in two tranches. Post conversion, on a fully diluted basis, the said acquisition would result in the holding of upto 41.21%. The proposed acquisition by JM Financial Products is with the intention to transfer the entire equity stake in Vendiman (after factoring the carrying cost for the period it remains with JM Financial Products) to a Fund/Trust that is sponsored/managed by JM Financial Investment Managers Limited, the asset management company for Alternative Assets business in the JM Financial Group. This is subject to receipt of all the required approvals, if and to the extent required.

On 24 November 2017, JM Financial Limited announced that JM Financial Home Loans Limited, a step down subsidiary of the company, has received certificate of registration from National Housing Bank for carrying out housing finance activities. JM Financial Home Loans commenced housing finance business in December 2017 with a focus on affordable housing.

The Committee of the Board of JM Financial Limited at its meeting held on 6 February 2018 approved the allotment of 4.01 crore equity shares to the eligible qualified institutional buyers at the issue price of Rs 162 per equity share, aggregating to Rs 650 crore under the SEBI Regulations and Section 42 of the Companies Act, 2013. Earlier, the company's Board of Directors at its meeting held on 2 February 2018 approved closure of the qualified institutional investors (QIIP) issue on 2 February 2018.

On 14 March 2018, JM Financial Products Limited announced that it has further acquired an aggregate of 7.60 crore equity shares of the face value of Rs 10 each of JM Financial Asset Reconstruction Company Limited, a subsidiary of the company, pursuant to the allotment of 7.40 crore equity shares subscribed by the company on rights basis and 20.41 lakh shares by way of secondary transfer. Consequent to the above acquisition, the shareholding of the company in JM Financial Asset Reconstruction Company Limited has increased from 50.01% to 57.07%.

On 16 April 2018, JM Financial Products Limited, a subsidiary of JM Financial Limited, completed the second leg of acquisition of 8.78 lakh equity shares of Spandana Sphoorty Financial Limited (Spandana). With this acquisition, JM Financial Products' holding is 12.95% of the current outstanding total equity shares of Spandana and 6.47% on a fully diluted basis.

On 25 May 2018, JM Financial announced that its subsidiary company viz., JM Financial Products Limited, has transferred its entire equity and preference shareholding in Vendiman Private Limited to JM Financial India Fund II (a scheme of JM Financial India Trust II, A SEBI registered Category II Alternate Investment Fund). Further, JM Financial Products Limited has transferred 18.37 lakh shares in Spandana Sphoorty Financial Limited (Spandana) to JM Financial India Fund II. With the above transfer and conversion of preference shares by a few shareholders of Spandana, JM Financial Products' holding in Spandana has reduced to 3.75% of its existing outstanding total equity shares and on a fully diluted basis it has reduced to 3.39%.

As on March 31, 2019, the Company had 15 subsidiaries (including step down subsidiaries), a partnership firm and an associate company.

During the FY 2018-19, the Company mobilised more than Rs 4,000 crore in various corporate fixed deposits and bonds and over Rs 1,200 crore in various mutual fund schemes. The Company's online platform saw a major progress this year with EVOLVE Account opening application. During the year 2018-19, online transactions gained momentum with total 14,340 clients doing transactions online. More than 1,040 IFDs are using online facility.During the year 2018-19, the Company carried out debt trading transactions in Government securities and Non SLR securities. It also syndicated loans through its debt syndication team.

During FY 2018-19, the Company successfully launched the public issue of Non-Convertible Debentures for JM Financial Credit Solutions Limited and raised a cumulative amount of Rs 1,014 Crore in two tranches.

During the FY 2018-19, the Company filed a draft shelf prospectus for JM Financial Products Limited. for an amount of upto Rs 2000 crore. The debt public issue was launched in the month of April 2019.

In 2019, the Company acquired 2.18% stake in JM Financial Asset Reconstruction Company Limited (JMFARC).

The Company made an issue of equity shares under the Qualified Institutional Placement (QIP) route on a private placement basis in June 2020. Through the QIP issue, it raised an aggregate of Rs. 770 crore by allotting 11,00,00,000 equity shares of the face value Re. 1 each to Qualified Institutional Buyers at an issue price of Rs. 70/- per equity share (including premium of Rs. 69/- per share) where, the said equity shares got listed on BSE Limited and National Stock Exchange of India Limited.

JM Financial Products Limited raised Rs. 387 crore through a public issue of secured, rated, listed, redeemable, Non-Convertible Debentures in April 2019 (Tranche I). It introduced Elite Wealth Management Group, which commenced operations in October 2019. During FY 2019-20, it progressed in digital transactions and launched new processes like FD Online and IPO Online. The Average Assets Under Management (AAUM) of JM Financial Mutual Fund for FY 2019-20 were ~Rs. 6,495 crore with Equity AAUM ~Rs. 4,146 crore and Debt AAUM ~Rs. 2,349 crore.

In June 2021, JM Financial Private Equity Fund finalised an investment of Rs. 350 million in Walko Food Company Private Limited, a Pune-based consumer packaged food company to fund the Company's current expansion plans. In September 2021, Company announced Tranche - I Public Issue of Rs. 500 crore of Secured, Rated, Listed, Redeemable Non-Convertible Debentures (NCDs) of face value of Rs. 1,000 each. It launched a intuitive digital investment platform, Bondskart, with access to debt securities in November 2021. It led the Equity Capital Markets and executed over 50 transactions by raising funds through initial public offerings, qualified institutions placements, rights issues, liquidity, etc. Over 190 corporate raised about Rs. 2 trillion through equity markets to fund their capital requirements and provide exit to existing shareholders. During December 2021, JM Financial India Growth Fund III completed its first closing. As on March 31, 2022, Fund III has finalised three investments, API Holdings Private Limited, Aarman Solutions Private Limited, and BigHaat Agro Private Limited.

During 2022-23, a Scheme of Arrangement for demerger of the Undertaking comprising of Private Wealth and Portfolio Management Services (PMS) along with the investment in JM Financial Institutional Securities Limited from its wholly owned subsidiary, JM Financial Services Limited to JM Financial Limited (the Company). Further, the Scheme comprised merger of JM Financial Capital Limited into JM Financial Services Limited with the Appointed Date, April 1, 2023.