Shares of IIFL Securities Ltd. tumbled more than 19% in early trading on Tuesday after the market regulator barred the company from onboarding new clients over misuse of client funds.
The Securities and Exchange Board of India said in its order that IIFL Securities "flagrantly violated" the rules on segregation of funds and securities of clients between 2011 and 2017.
The company is preparing to challenge the order in the Securities Appellate Tribunal, according to its statement.
Shares of IIFL Securities plunged as much as 19.24% as of 9:28 a.m. on Tuesday compared to a 0.39% decline in the benchmark Nifty 50.
The total traded quantity so far in the day stood at 80.1 times the 30-day average volume.
According to Bloomberg data, the one analyst tracking the stock has recommended a 'hold' rating on the stock. The return potential implies a potential upside of 8.2% over the next 12 months.
The shares of IIFL Finance Ltd. were trading as much as 5.81% lower at 9:32 a.m.
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