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SEBI Crackdown: Karvy Investor Services Loses Merchant Banker Registration

In a significant move, the Securities and Exchange Board of India (SEBI) has cancelled the registration of Karvy Investor Services Ltd (KISL) as a merchant banker due to a breach of eligibility criteria.

The Inspection

  • SEBI conducted an inspection of Karvy Investor Services during March 15-17, 2023.
  • During the on-site inspection, SEBI found that KISL was not functioning or operational at both its registered and correspondence addresses.
  • Further inspection revealed that the merchant banker lacked the required infrastructure.

Cancellation of Registration

  • Citing the findings, SEBI has cancelled the certificate of registration of Karvy Investor Services Ltd as a merchant banker.
  • The order comes into immediate effect.

Previous Action

  • In April 2023, SEBI had barred KISL from taking new clients for allegedly violating regulatory norms.
  • At that time, SEBI found that KISL neither had any physical infrastructure nor any employees working for it.


  • Karvy Investor Services was registered as a merchant banker with SEBI in December 2013.
  • Merchant bankers play a crucial role in the capital market, assisting companies with various services like initial public offerings (IPOs), mergers and acquisitions, and other corporate advisory services.

SEBI’s decision to cancel KISL’s registration as a merchant banker highlights the regulator’s commitment to maintaining high standards and ensuring strict compliance with eligibility criteria within the capital markets. This action is aimed at safeguarding the interests of investors and upholding the integrity of the financial system.

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