JMJ Fintech Approves Rs 15.8 Million Preferential Issue

MUMBAI — Chennai and Coimbatore-headquartered non-banking financial company (NBFC) JMJ Fintech Ltd has approved a preferential issue of equity shares valued at 15.8 million rupees ($190,000), according to regulatory filings submitted to domestic stock exchanges. The capital enhancement measure—approved by the board of directors pursuant to Chapter V of the Securities and Exchange Board of India (SEBI) Issue of Capital and Disclosure Requirements Regulations—is designed to augment long-term operational liquidity, strengthen risk-weighted capital buffers, and finance loan portfolio growth across retail and micro-enterprise lending segments.

Transaction Structure and Equity Allotment Terms

Under the resolution passed by the board of directors, JMJ Fintech will issue and allot up to 1.6 million equity shares on a preferential basis to designated non-promoter and strategic investor groups. The issue price was determined in accordance with the statutory pricing formula prescribed under SEBI guidelines, supported by an independent valuation report from a registered valuer.

+-------------------------------------------------------------------+
|            JMJ FINTECH PREFERENTIAL ISSUE SUMMARY                 |
+----------------------+--------------------------------------------+
| Issuing Entity       | JMJ Fintech Limited (BSE: 538834)          |
| Total Issue Size     | Rs 15.8 Million (Rs 1.58 Crore)            |
| Securities Offered   | Up to 1.60 Million Equity Shares           |
| Face Value           | Rs 10.00 per share                         |
| Primary Objective    | Working Capital, Loan Book Growth, CRAR    |
| Statutory Framework  | Chapter V, SEBI ICDR Regulations 2018      |
| Approvals Required   | Shareholder EGM/Postal Ballot & Exchange   |
+----------------------+--------------------------------------------+

The fresh allotment expands the company’s paid-up equity base, offering incremental equity headroom to leverage low-cost debt instruments without breaching statutory capital-to-risk-weighted asset ratio (CRAR) benchmarks set by the Reserve Bank of India (RBI).

Capital Deployment and Balance Sheet Expansion

Incorporated in 1982 and registered with the Reserve Bank of India as a non-systemically important, non-deposit-taking NBFC, JMJ Fintech specializes in secured corporate advances, high-net-worth individual (HNI) credit, small-and-medium enterprise (SME) funding, and capital market advisory services.

The decision to execute a preferential issue follows recent capital optimization exercises, including a previously concluded rights issue where funds were deployed toward working capital and debt repayment. By raising fresh capital through this preferential issue, the lender aims to scale its micro-credit originations and small-business financing pipelines in southern regional trade corridors, particularly across Tamil Nadu and Kerala.

Alongside the equity placement, the company’s board previously evaluated complementary fund-raising mechanisms, including the private placement of secured, unrated, redeemable non-convertible debentures (NCDs) aggregating up to Rs 2 crore to optimize its overall weighted average cost of capital.

                  CAPITAL TRANSMISSION ARCHITECTURE
  +-------------------------------------------------------------+
  |  Preferential Equity Allotment (Rs 15.8 Million Issue)      |
  +-------------------------------------------------------------+
                                |
      +-------------------------+-------------------------+
      |                                                   |
      v                                                   v
+-------------------------------+   +-------------------------------+
| Tier-I Net Worth Expansion    |   | SME & Retail Credit Advances  |
| • Regulatory CRAR Compliance  |   | • Collateralized Micro-Loans  |
| • Enhanced Debt-Leverage Room |   | • Working Capital for SMEs    |
| • Debt Repayment Optimization |   | • Advisory Service Support    |
+-------------------------------+   +-------------------------------+
                                |
                                v
               +---------------------------------+
               | Sustainable Asset-Book Growth   |
               | (Lower Cost of Borrowing Ratio) |
               +---------------------------------+

Impact on Retail Borrowers, Micro-Enterprises, and Shareholders

The preferential allotment carries measurable operational and governance implications across the company's financial ecosystem:

• Micro, Small, and Medium Enterprises (MSMEs): Infusion of fresh tier-one capital enhances the non-bank lender's ability to sanction short-term collateralized loans to small traders and commercial borrowers facing working capital delays.

• Public and Institutional Shareholders: While the issuance introduces slight dilution to existing public shareholdings, the capital injection provides debt-servicing safety and supports return on equity (ROE) expansion through active credit book growth.

• Debt and Credit Rating Profile: A strengthened net worth structure enhances the company's borrowing capability when raising funds through commercial banks, wholesale credit desks, and debt market participants.

• Regulatory Compliance Framework: The fresh equity improves liquidity ratios, ensuring alignment with RBI prudential directives on asset-liability management (ALM) for small NBFCs.

Official Sources

Corporate resolutions, preferential allotment schedules, and valuation parameters were formally filed under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations. Formal disclosures were deposited with the BSE Limited and published pursuant to disclosure directives maintained by the Securities and Exchange Board of India and the Reserve Bank of India.

Official Perspectives

"According to regulatory disclosures submitted by the company, the board of directors approved the proposal for the issuance of equity shares by way of a preferential issue in strict accordance with the provisions of the Companies Act, 2013, and SEBI ICDR Regulations, to support operational expansion and long-term liquidity."

Why It Matters

Niche and regional non-banking financial companies play an important role in extending credit to underserved MSME segments that fall outside the coverage of traditional commercial banking networks. Securing direct equity through a preferential issue allows smaller lending institutions like JMJ Fintech to expand their loan books, maintain healthy capital adequacy margins, and manage asset-liability mismatches without over-relying on high-cost wholesale borrowing.

Key Facts at a Glance

• Total Consideration: JMJ Fintech approved a preferential issue valued at Rs 15.8 million.

• Share Quantum: Up to 1.6 million equity shares with a face value of Rs 10 each will be allotted.

• Listing Exchange: Shares of JMJ Fintech trade on BSE Limited under the scrip code 538834.

• Core Objectives: Working capital replenishment, loan book expansion, and regulatory capital adequacy enhancement.

Frequently Asked Questions

What is the value of the preferential issue approved by JMJ Fintech?

The board of directors of JMJ Fintech approved a preferential issue of equity shares aggregating up to Rs 15.8 million (Rs 1.58 crore).

How many equity shares are being issued under this round?

The non-banking financial lender will issue and allot up to 1.6 million equity shares at a nominal face value of Rs 10 per share.

What will the proceeds of the preferential issue be used for?

The proceeds will be deployed to expand the company's loan book, fulfill ongoing working capital requirements, and strengthen capital adequacy reserves for lending operations.

Source: BSE Limited, Securities and Exchange Board of India, Reserve Bank of India, JMJ Fintech Investor Relations