In More Trouble For Mutual Funds, Franklin Templeton Hit By New Default
Franklin Templeton Mutual Fund said on Friday that it is evaluating recovery proceedings against Essel Infraprojects Limited (EIL), which defaulted on the maturity obligation of non convertible debentures (NCD) currently valued at Rs 92 crore. "The NCDs are backed by a pledge of listed shares of Zee Entertainment Enterprises Ltd (ZEEL), Dish TV India Ltd, unlisted shares of EIL, personal guarantee of Mr Subhash Chandra and corporate guarantee," US-based Franklin Templeton - which wound up six of its debt schemes in India last month - said in a release on Friday.
Out of the six debt mutual fund currently being wound up, four had exposure to the NCDs. These four schemes are: Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund and Franklin India Short Term Income Plan.
Franklin Templeton said the NCDs are currently fair valued at Rs 92 crore in its portfolios after a haircut of 85 per cent. The maturity value of the NCDs, including redemption premium, was Rs 616 crore. The issuer was unable to meet the obligation on the maturity date of May 22.
As far as proceedings are concerned, the mutual fund house has appointed a legal counsel and is looking to get maximum recovery.
"We have appointed a legal counsel and are actively considering all necessary actions to maximise recovery value. The schemes will continuously monitor the developments in EIL and take appropriate steps in the best interest of its unit-holders," Franklin Templeton said.
The fund house also said the event does not have any impact on the net asset values (NAVs) of the schemes as of May 22, compared to their NAVs as of May 21.
"This only reflects the realisable value basis the current share cover and does not indicate any reduction or write-off of the amount repayable by Essel Infraprojects. The valuation would be monitored daily and the receivable will be adjusted to reflect any material change in the share cover (listed equity shares),” Franklin Templeton added.
-
Talking Points This Week: Leadership Shock At Nvidia, Earnings Strength, And The Fog Over Hormuz
The Anthropic IPO pricing and first trading day, Nvidia's upcoming earnings, and any fresh signals from Iran will set the tone for the following week.
-
Signature Play: The Classic Cocktail Is Dead. Or Is It?
Classic cocktails are disappearing from India's cocktail menus. But they're still being ordered, taught to bartenders and borrowed from. So, who's really having the last drink?
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
