The bidding process of Demat accounts and trading accounts of Karvy Stock Broking Ltd (Karvy Stock Broking Ltd) has been completed since it was caught in the fraud. Axis Securities Ltd, where it has managed to win a bid to acquire a trading account opened in Karvy. At the same time, IIFL Securities has won bids for around 11 lakh Demat accounts opened in Karvy. The bidding process of stock broking firm Karvy was conducted jointly by the National Stock Exchange (NSE), the Bombay Stock Exchange (BSE) and the Metropolitan Stor Exchange (MSE).
Let us tell you that depositors have Rs 3.01 lakh crore in Demat accounts opened in Karvy. After the bidding process and other formalities are completed, the money will be returned to the investors and the investors who open a demat account in Karvy will now be able to trade on the stock exchange. SEBI has revoked Karvy’s license, but has also made arrangements to get investors’ money. Investors can claim till March 4, 2021 to get their money back. Karvi Stock Broking’s trading terminals on the NSE and BSE were closed in December 2019 following the SEBI order.
After winning the bid, IIFL Securities will become the third largest stock broking platform in the country after Zerodha and Upstox. Post acquisition, the number of demat account holders of IIFL Securities will increase to 13.83 lakhs. IIFL Securities acquired Karvy’s demat accounts for about Rs 140 crore. At the same time, after the acquisition of trading accounts of Karvy, the number of customers of Axis Securities will increase from 25 lakh to 36 lakh. After winning the bid, IIFL Securities Chairman R Venkataraman said that now 11 lakh investors whose accounts were closed for more than 1 year will be able to trade on the stock market again.
What is the whole matter
Karvy Stock Broking Ltd took a loan to raise funds by keeping the shares of its clients as secret. When the scam came to know of the market regulator SEBI, Sebi revoked Karvy’s license and banned trading. This led to the closure of its trading terminals at BSE, NSE and MSE. Because of this, the accounts of those opening demat and broking accounts in Karvy Stock Broking Ltd were frozen and their money got stuck.