Indiabulls Securities and Karvy will be hit hard by the Sebi’s interim order. As the two entities have been barred from the market, they won’t be able to do any business on behalf of investors or for themselves.Many of the companies and persons — including Indiabulls — indicted by the Sebi are likely to move the Securities Appellate Tribunal (SAT) against the order.Hyderabad-based Karvy is an integrated financial services provider, and ranked among the top five in the country in all its business segments, serves over 16 million individual investors in various capacities, and provides investor services to over 300 corporates, comprising the who is who of corporate India.As Karvy is a leading registrar and IPO manager, the Sebi ban will force them to suspend its activities on the IPO front. Karvy was involved in most of the recent IPOs in one way or other.Karvy, headed by C. Parthasarathy, covers the entire spectrum of financial services such as stock broking, depository participants, distribution of financial products (mutual funds, bonds, fixed deposit, equities) insurance broking, commodities broking, personal finance advisory services, merchant banking & corporate finance, placement of equity and IPOs, among others.In less than five years, Indiabulls — promoted by three IIT engineers — has become the country’s largest retail broking house with a client base of over 2.50 lakh, profit growth of 100 per cent plus (Rs 50 crore in 2004-05) and skyrocketing net worth (Rs 1,300 crore).The company started operations with just one office and 15 staffers in 2000, failed to follow the know your client (KYC) norms closely and got entangled in the IPO scam. The company has 140 offices across India. Nearly one lakh investors do online business through its system. Indiabulls also entered the real estate business in a big way and bought mill land worth over Rs 400 crore in Mumbai.Investors who use Indiabulls platform may not be able to use the system. ‘‘They will have to explore other options,’’ said a market analyst.Though many banks — including HDFC Bank, IDBI Bank, Centurion and ING Vysya Bank — were told not to open fresh open demat accounts, the Sebi order won’t have any impact as demat business is only a fraction of their total business.
