ADITYA Birla Money, the brokerage arm of the Aditya Birla Group, is said to have incurred losses of Rs 120150 crore for its HNI investors, after its bets on a structured product based on Nifty index went wrong recently, two persons familiar with the development said.
The HNI clients had put money in a structured product, under the `strangle' strategy. A strangle involves purchase or sale of particular option derivatives that allows the holder to profit based on how much the price of the underlying security moves, with relatively minimal exposure to the direction of price movement.
Apparently, the bets were yielding good returns for both the writer as well as the investors as long as Nifty was moving in a range. The bets went wrong after the sharp upmove in the index, another person said. But, this could not be confirmed.
Meanwhile, Kanwar Vivek has exited as MD with effect from October 15. The company also appointed Pankaj Razdan, a director of the company as manager.
