Vikram Pandit to invest in JM Financial; stock up 7%

The former chief executive officer of Citigroup Inc Vikram Pandit and Hari Aiyar will each buy 1.5 percent stake in JM Financial through warrants, the financial service group today announced.

These warrants will be priced at Rs 19.05 per warrant as per Securities and Exchange Board of India norms, reports CNBC-TV18's Sajeet Manghat, quoting sources. These warrants can be converted anytime in the next 18 months.

Pandit will also form a distressed asset fund jointly with JM Financial, which will have initial target capitalisation of USD 100 million. Pandit will play a key role in the expansion of the lending and financing business of JM Financial and will be nominated as the non-executive chairman of the NBFC (non-banking finance company). However Pandit or Aiyar will not be holding any stake in the NBFC, sources said.

Also Read - Ex-Citi boss Vikram Pandit to lead JM Fin banking foray

In its board meeting on Thursday, JM Financial also decided to apply for a banking licence as per the Reserve Bank of India’s guidelines. Pandit will be nominated as non-executive chairman for the proposed bank as well.

At 09:21 hrs JM Financial was quoting at Rs 25.25, up Rs 1.70, or 7.22 percent. It has touched a 52-week high of Rs 26.80.

It was trading with volumes of 3,235,637 shares. In the previous trading session, the share closed up 16.01 percent or Rs 3.25 at Rs 23.55.