IIFL Securities’ shares plunge over 20% after Sebi bans firm from onboarding new clients for 2 yrs

Shares of IIFL Securities plunged as much as 24 per cent in the morning trade on Tuesday after market regulator Sebi on Monday barred the company from onboarding clients for 2 years.

In the intraday session, IIFL Securities Ltd's stock plunged 23.8 per cent on NSE to touch a low of Rs 57.50. (File image)

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Shares of IIFL Securities plunged as much as 24 per cent in the morning trade on Tuesday after market regulator Sebi on Monday barred the company from onboarding clients for 2 years.

In the intraday session, IIFL Securities Ltd’s stock plunged 23.8 per cent on NSE to touch a low of Rs 57.50. On BSE, the stock touched an intraday low of Rs 58, down 22.6 per cent.

By 10.30 am, shares of IIFL Securities Ltd were trading 13.10 per cent lower at Rs 61.83. However, BSE benchmark Sensex was trading 0.55 per cent lower at 62,822.84, and broader NSE Nifty was down 92.15 points, or 0.49 per cent to 18,663.30.

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The Securities and Exchange Board of India (Sebi) on Monday barred IIFL Securities from onboarding new clients for two years for violating the code of conduct regulations for stock brokers.

The market regulator in its order said it disposes of the two inquiry proceedings initiated against the brokerage, following six inspections conducted by the regulators into the affairs of IIFL Securities.

The regulator’s action came after the company mixed clients’ funds with proprietary funds; used credit-balance client accounts to settle obligations of debit-balance client accounts, and used credit-balance client accounts to settle proprietary-trade obligations.

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