Karvy sees light at the end of tunnel
Hyderabad: Allaying fears among stakeholders, Karvy Group has assured that things would return to normalcy by January 2021 as restructuring of business coupled with fund disbursals from buyers, will enable the organization to fulfill all its obligations.
Karvy Group chairman C Parthasarathy, popularly known as CP, termed NSE's decision to cancel Karvy Stock Broking Ltd's (KSBL) membership as unfortunate outcome despite Group's assurance on honouring all the obligations through stake divestment. He exerted confidence that latest order can be reversed once it clears all the obligations.
In his message to all the employees, CP said: "Let me assure you that the buyer stands committed to the transaction and will fulfil his commitment to us as soon as he recovers from the virus, and is able to travel and coordinate the remittances. This would enable us to appeal expeditiously for the adverse order to reversed. Once our obligations to our customers are fulfilled, the order so issued can be reversed. Therefore, the doors are not shut for us, and our dreams and hopes for a vibrant and a growing KSBL, God willing, will be realised. I want to assure you that this is not the end of the road for KSBL and we can certainly revive the broking business and put it back on its feet again."
Though other businesses of the Karvy Group are doing well, the brand Karvy has been impacted to a certain extent by the KSBL crisis.
Elaborating the diversified business of Karvy Group, CP further added that "it's important to note that broking business is not the only business that we have. It constituted less than 15 per cent, in value of all the businesses in the group. Even after the proposed sale of the stake in KDMSL, it would only constitute less than 40 per cent of only the financial services business, with Karvy Private Wealth, distribution, investment banking, fund management, depository services, NBFC, market research, etc., continuing to function independently. They have been extending valuable support to KSBL through these many difficult months and they will continue to support as best as they can. We don't usually focus on the strengths of the Group, but this crisis has taught me, at least, to see some of our businesses in a new light and to appreciate their strengths."
NSE informed Sebi that funds and securities worth Rs 2,300 crore, belonging to about 2.35 lakh investors of KSBL, have been settled so far. In a statement, NSE said: "While disciplinary proceedings are underway, funds and securities of approximately Rs 2,300 crore belonging to about 2,35,000 investors have been settled so far, with efforts focused on settlement of small investors. Investors with fund balances up to Rs 30,000 due from Karvy Stock Broking have been settled."