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Mumbai,
Hit by a slowdown due to COVID-19, investment advisor IndiaNivesh has decided to close its scheme in portfolio management services business due to recent market turmoil and challenging economic circumstances, the brokerage and investment advisor said. The company said they would be depositing client money in their respective bank accounts. More stock brokers are also likely to announce a temporary halt to their equity and commodity market-led activities due to the travel disruption caused by the ongoing nation-wide lockdown, sources told BusinessLine .
“In view of the current market volatility pursuant to the global outbreak of Covid-19 and its long-term impact on our business, we have decided to close our operation at IndiaNivesh Investment Managers. Thus our sole strategy of Sprout Portfolio will be wound up,” it added. The firm has been in this business since 2015,” IndiaNivesh said in a note to investors.
IndiaNivesh said it can either transfer cash to client accounts or return them their equity shares currently held in the portfolio.
About its equity brokerage business, IndiaNivesh said, "We are regular in meeting all the Exchange obligations, however, there have been some delays in releasing the payouts due to current lockdown, although broking operations are exempted from the lockdown, the critical staff is not able to reach the office for carrying out the smooth operations. We also deny all the rumours/speculation about our associations with any group whatsoever." There were market rumours of IndiaNivesh having investments in Kishor Biyani-led Future Group, the share price of which have crashed badly.
Sensex and Nifty the two benchmark indices have witnessed a 30 per cent fall in March alone from the peak levels. The fate of small and mid-cap stocks has been even worse with many have declined by 60-70 per cent in the span of a few weeks. Brokers say they were expecting the lockdown and disruption in transport to continue beyond the 21 days announced by the government until reporting of COVID 19 cases slow down. Brokers are also of the view that even after the lockdown is lifted, they feel it is unlikely that both foreign and domestic institutions will be able to immediately commit any major amount for equity investments in the wake of the severe economic slowdown. The share price of many brokerage companies has crashed by more than 50 per cent in the recent rout.
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