The six shuttered debt schemes of Franklin Templeton Mutual Fund continue to receive cash flows. Between April 24, 2020, and January 15, 2021, they have received Rs13,789 crore from maturities, pre-payments, and coupons. In the first 15 days of the current month, the schemes got Rs 669 crore, of which Rs617 crore was received as pre-payments.
In a letter to investors, Sanjay Sapre, president of Franklin Templeton Asset Management (India), said of the total amount received since April 24, 2020, slightly more than half had been from securities rated “A”, followed by securities rated “AA”. Much of this cash had been generated from securities which were unlisted, or where the fund house was a majority-holder.
“Most importantly, all of this cash has been received without any secondary market sale (active monetisation) of the securities in the six schemes. This points to the fact that the securities held in the funds can be monetised at fair value if given appropriate time under normal market conditions,” said Sapre.
Even Franklin India Short Term Income Plan turned cash positive recently, taking the total number of cash positive schemes to five. The five cash positive schemes have Rs9,190 crore available to return to unit-holders as on January 15, subject to fund running expenses.
Individually, Franklin India Low Duration Fund, Franklin India Ultra Short Bond Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund and Franklin India Short Term Income Plan have 63%, 50%, 41%, 26% and 9% of their respective assets under management (AUM) in cash.
The inflows received across six schemes are nearly 41% higher than anticipated in the maturity profile published for April 23, 2020. The borrowing levels in Franklin India Income Opportunities Fund continue to come down steadily and currently stand at 6% of AUM.
The result of the e-voting was announced by the Supreme Court on Monday. Of the total number of unit-holders who cast their votes, over 96% have voted in favour of winding up of the six schemes. Their consent vote took place from December 26 to December 28, 2020, followed by a unit-holders’ meet via video conference on December 29, 2020.
“We hope to commence distribution of investment proceeds at the earliest, subject to the directions of the Hon’ble Supreme Court,” added Sapre. The next hearing in this matter is scheduled to take place on January 25.
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