Rating agency ICRA has downgraded Karvy Stock Broking’s (KSBL) long-term bank lines from ‘BBB (Negative)’ to ‘BB (Negative)’ after the recent order passed by the market regulator Securities and Exchange Board of India (Sebi) against the broker.

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ICRA said that the order is expected to impact the KSBL’s operations negatively which in turn would affect the debt repayment capacity of KSBL.

The rating agency has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity’s management has remained non-cooperative, it said.

The rating is based on limited or no updated information on the entity’s performance since the time it was last rated in March 2019, it added.

Last week, Sebi banned Karvy Stock Broking from taking new clients and executing trades for existing customers over defaults worth Rs 2,000 crore and allegedly misappropriating money to fund its real estate arm, Karvy Realty.

According to the regulator, Karvy violated norms, including transferring client shares to itself, and pledging client shares to raise money, which is diverted to its real estate arm.