ICRA cuts Karvy Broking's credit rating to 'non-cooperating category'

Rating agency says the investment arm of Karvy Group didn't heed its requests for information about the company's performance.

Rating agency ICRA has downgraded Karvy Stock Broking Ltd and Karvy Data Management Services ltd (KDML), citing insufficient information regarding the companies’ performance.

ICRA said the management hasn’t given information it sought, as it moved the companies to 'Non-Cooperating Category'.

The rating for Karvy Stock Broking’s long term loans has been cut from “A” to “BBB”. The current rated amount (loans plus commercial paper) of the company is Rs 550 crore.

Karvy Stock Broking, an arm of the Karvy Group, provides a combined account facility catering to investment opportunities such as equities, derivatives, currency, IPOs, mutual funds and NCDs.

The rating of Rs 370.59 crore on Long-term Fund Based/Non-fund Based for KDML is driven by an unconditional and irrevocable guarantee given by parent entity Karvy Stock Broking. Rating has been downgraded from “A” to “BBB”.

ICRA said Karvy Stock Broking’s has remained non-cooperative despite repeated requests for information, prompting to flag uncertainty around its credit risk.

The Karvy Group is a diversified business group that spans the entire financial services spectrum as well as data processing and managing segments. It caters to over 70 million individual investors in various capacities and provides investor services to over 600 corporate houses, comprising the best of Corporate India.