IndiaNivesh closes down PMS business

Mumbai: The portfolio management services (PMS) business of Mumbai-based brokerage India-Nivesh has become the first casualty of the turmoil in the stock market in the past 40 days triggered by the spread of coronavirus. The firm is shutting down its fund management unit for rich clients amid speculation the group has not been able to recover a loan to the promoter of a retail company following the plunge in stock prices. The crisis has also led to its stock broking arm delaying payouts to clients, said sources.

In an email communication to clients on Sunday morning, Sandeep Jain, managing director of India-Nivesh Investment Managers, announced the closure of its PMS business called IndiaNivesh Small Cap (Sprout).

“In view of the current market volatility pursuant to the global outbreak of Covid-19 and its longterm impact on our business, we have decided to close our operation at IndiaNivesh Investment Managers, a Sebi-registered portfolio manager. Thus, our sole strategy of Sprout Portfolio will be wound up,” he said.

The assets under custody of IndiaNivesh Small Cap (Sprout) have declined from Rs 90 crore to Rs 60 crore in the past one month, according to sources. IndiaNivesh PMS has about 190 clients.

The market is abuzz with talk that the IndiaNivesh group is also shutting down its institutional broking business.
In response to an email query, an IndiaNivesh spokesperson denied linkages to the retail group, “As regards to broking operations, we are regular in meeting all the Exchange obligations, however there have been some delays in releasing the payouts due to current lock down. Although broking operations are exempted from the lock down, the critical staff are not able to reach the office for carrying out the smooth operations” the spokesperson said. “All our other businesses remain operational as of now” he said. The group declined to comment.

For the nine months ended December 2019, IndiaNivesh posted a loss of Rs 7.15 crore compared to a Rs 5-crore loss in the same period last year. The company’s borrowing has increased from Rs 136 crore in March 2016 crore to Rs 828 crore in September 2019.