What happens now that all the Karvy trading and demat accounts are auctioned to IIFL Securities and to Axis Securities? What happens to Karvy clients?
Answer
Answer
When Karvy was barred from trading in late November 2019, the big question was what happens to the trading clients and the demat clients of Karvy. Karvy has over 11 lakh demat accounts and a similar number of trading accounts. Subsequently, NSDL and CDSL decided that all the trading and demat accounts of Karvy would be auctioned to the highest bidder.
Based on several rounds of bidding and discussions, it has been finally decided and confirmed that Axis Securities and IIFL Securities, two leading full-service brokerages in India, have won bids. They will acquire the trading and demat accounts of Karvy Stock Broking, which has already been asked to stop all securities related businesses effective immediately.
Axis Securities emerges as the most successful bidder for the trading accounts held by Karvy with the NSE and BSE and this will effectively increase the number of trading accounts with Axis Securities from 25 lakhs to 36 lakhs. Axis Securities is part of the Axis Bank group and is among the top brokers in India in terms of retail reach and number of active accounts.
IIFL Securities, the broking arm of the diversified IIFL group, has emerged as the successful bidder for demat accounts of Karvy. For IIFL Securities, this deal will add 11.06 lakh demat accounts consisting of 3.82 lakh CDSL and 7.23 lakhs NSDL accounts. What could be a little intriguing is that customers normally prefer to keep trading and demat account at the same broking house, so it is not clear how that is going to be managed.