Karvy Data Management Services, a company within the troubled Karvy group of financial services companies has sold its GST Software and Services business to Cleartax. The deal which sees Karvy’s 200 enterprise clients and 25 employees being transferred to Cleartax along with the technology platform has been concluded for an undisclosed amount.
The ownership of the entity continues to be with the Karvy group of companies. Karvy may use the proceeds from this deal to settle part of its Rs 678 crore dues it owes to banks and its investor clients.
Karvy Stock Broking got into trouble with SEBI following disclosures of having pledged its clients’ securities to raise loans from banks without the consent of the clients. SEBI has imposed a lot of restrictions on the company. The current deal that Karvy Data Management Services has entered with Cleartax will not be impacted by these restrictions since these are two different entities.
Karvy has promised to clear the dues before the end of this month, which also happens to be the end of the financial year 2019-20.
Cleartax hopes to gain through the addition of enterprise customers for its GST related services and it gets an opportunity to expand its operations as well.
Cleartax already has a base of 400 customers to whom it offers SAP based GST software and e-invoicing programmes. ClearTax claims it has cutting edge solutions for GST 2.0, new GST return filing system, combined with its e-Invoicing and e-way bill software, which make it easier for customers to stay GST compliant while ensuring efficient use of their working capital.
Thus, is should prove to be a win-win deal for all three, Cleartax, Karvy and Karvy’s customers who will now become Cleartax customers. Cleartax has promised a seamless integration with their setup and without much pain.