The six shuttered debt schemes of Franklin Templeton Mutual Fund received cash flows of Rs 2,206 crore from various issuers in August. The fund house in a letter to investors on Thursday said a large portion of the money received during the month was from Vedanta.
Sanjay Sapre, president at Franklin Templeton Asset Management (India), in a letter to investors said on August 17 that four out of the six schemes had cumulatively received Rs 1,050 crore as part of maturity proceeds and interest payments from Vedanta.
As on August 31, Franklin India Low Duration Fund and Franklin India Credit Risk Fund turned cash positive, taking the total count of cash-positive schemes to four. Even the cash position in Franklin India Ultra Short Bond Fund and Franklin India Dynamic Accrual Fund rose to 31% and 14% of their respective assets under management as of August 31. Borrowing levels in the remaining two schemes continue to come down.
Recently, four debt schemes saw a fall in their net asset values as Rivaaz Trade Ventures (RTVPL) – a Future group entity – defaulted on its scheduled debt obligation due on August 31. Due to the default in payment, the securities of RTVPL was valued at zero based on Amfi’s standard hair cut metrics.
However, Franklin believes that Reliance Retail’s announcement of the acquisition of the retail, wholesale logistics and warehousing business of Future group is a positive development for the non-convertible debentures held by the schemes.
In the letter Sapre also mentioned that barring issues in payment by a small number of issuers such as the Future Group, Essel and Anil Dhirubhai Ambani Group, all other investee companies in the company’s portfolio have made the payments as scheduled, since the day of the winding up.
In an update on the cases filed against the fund house which is currently being heard in the Karnataka High Court, Sapre stated the court has finished hearing the petitioners from the Delhi, Gujarat and Madras HCs.
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