IIFL Securities scrip rallies over 5 per cent; hits 52-week high

Shares of IIFL Securities rallied more than 5 per cent in the mid-session trade on Friday after the SAT set aside Sebi’s order prohibiting the company from onboarding new clients for two years.

In the intra-day trade, shares of brokerage firm IIFL Securities touched a 52-week high of Rs 134.40 each on BSE and NSE.

In the equity markets, the BSE Sensex gained 122.66 points or 0.18 per cent higher to trade at 69,644.35, while Nifty rose 6.05 points to trade at 20,907.20.

On Thursday, the Securities Appellate Tribunal (SAT) set aside the market regulator Sebi’s order prohibiting IIFL Securities from onboarding new clients for two years, and slashed the fine levied on the brokerage house to Rs 20 lakh from Rs 1 crore.

The order came after IIFL Securities, earlier known as India Infoline Ltd., filed an appeal against the order passed by the Securities and Exchange Board of India (Sebi) in June.

The capital markets regulator, in June, prohibited IIFL Securities from taking up new clients for two years for alleged mis-utilisation of client funds.

Setting aside Sebi’s order, SAT Presiding Officer Justice Tarun Agarwala and technical member Meera Swarup said, “There has been no misuse of client funds and by wrongly considering the non-funded portion of the bank guarantee as per the 2016 circular, an attempt has been made out to show that there was a misuse of client funds which, in our opinion, is patently erroneous”.

Further, it said that there was no failure on the part of the appellant (IIFL Securities) to segregate the money of the client. It is not that these monies have been misused for their purposes, and so no penalty under the Securities Contracts (Regulation) Act (SCRA) could be imposed.