JM Financial ARC's capital adequacy falls below regulatory norms

JM Financial Asset Reconstruction Company’s (JMFARC’s) capital adequacy fell below regulatory requirements following a provision of Rs 846.86 crore for expected credit loss on distressed loans in FY24. The existing shareholders, including promoter JM Financial, will infuse up to Rs 1,000 crore in equity to shore up capital. This is to meet regulatory norms and support business growth, according to JM Financial’s earnings filing with the stock exchanges. The ARC’s capital adequacy ratio (CAR) fell to 2.91 per cent in March 2024 from 24.67 per cent in March 2023. ARCs have to maintain at least 15 per cent CAR. The ARC’s net loss for FY24 widened to Rs 942.42 crore from a loss of Rs 154.93 crore in FY23.The ARC’s capital adequacy ratio (CAR) fell to 2.91 per cent in March 2024 from 24.67 per cent in March 2023. ARCs have to maintain at least 15 per cent CAR. The ARC’s net loss for FY24 widened to Rs 942.42 crore from a loss of Rs 154.93 crore in FY23.