IndiaNivesh Shares and Securities has shut down all its broking operations on account of the liquidity crunch caused due to the ongoing coronavirus pandemic.
In a statement issued to the stock exchanges late on Wednesday, IndiaNivesh said its broking subsidiary, which has been in business for more than 14 years, is unable to raise funds due to the credit freeze and hence it has decide to voluntary disable it’s stock broking operations.
“... the ongoing global pandemic called the novel coronavirus [COVID-19] has led to an unprecedented fall in the markets coupled with the present lockdown. This has brought economic activity to a grinding halt. These extraordinary events have exacerbated an economic slowdown and led to an unprecedented and unanticipated liquidity crunch,” the stock exchange notification said.
“INSSPL (IndiaNivesh Shares and Securities Private Limited) nevertheless have managed to fulfil its settlement obligations during this period. The situation has been compounded owing to the present lockdown and the credit freeze in the market and due to the same, they are unable to raise funds from financial institutions/banks and thus the situation has become unfavourable,” It added.
The statement stated that the broking firm will neither solicit new clients nor take any fresh orders or transactions with its existing clients. The development comes close on the heels of the group shutting its portfolio management services (PMS), on account of the “recent market turmoil and difficult economic circumstances due to ongoing COVID-19 issues.”
The entity had a scheme focussed on small cap stocks called Sprout. While making the PMS closure announcement on Monday, the listed firm said broking operations would continue though there “have been some delays in releasing the payouts due to current lockdown.”
It attributed the delays to the lockdown on account of which critical staff are not able to reach the office for carrying out operations in a smooth manner.
