On 31 December 2019, the beleaguered Karvy Group announced a major corporate restructuring to separate its non-financial businesses from the financial business. Former chief of Dhanalaxmi Bank, Amitabh Chaturvedi, will head the financial business of Karvy group. The company has not announced the head for its non-financial business. It maybe recollected that on November 22, SEBI had barred from taking new brokerage clients and also prevented it from using the power of attorneys (PoA) given by its clients after Karvy was found to have misused client securities to the tune of over Rs.2,000 crore. Later in early December, the stock exchanges and the commodity exchanges suspended the membership of the Karvy group.

Chaturvedi has the task of completely overhauling the governance processes and ensure best practices in the financial line of business. As per a Karvy statement, business lines like stock broking, wealth management, commodities trading and investment banking will come under the financial services vertical. The non-financial vertical will consist of data management services, data analytics, market research and other allied businesses.

However, there are 3 key challenges for Karvy. Firstly, for the financial side of the business to have any serious value, Karvy will have to get back its trading license for broking and commodities trading. Secondly, the financial side of the business is largely a business of trust and relationships and that could suffer in the aftermath of the recent issues that the group has had. Thirdly, the non-financial business has been a support business largely dependent on the financial business growth so future growth could be a challenge.