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finance | IST

HDFC AMC takes Essel on its books and will repay investors in full

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HDFC Asset Management Company on Monday said that it will provide a liquidity arrangement to certain fixed maturity plan (FMP) schemes of HDFC Mutual Fund to deal with the liquidity crunch owing to their exposure to the non-convertible debentures (NCDs) issued by companies promoted by Essel  Group.

HDFC Asset Management Company on Monday said that it will provide a liquidity arrangement to certain fixed maturity plan (FMP) schemes of HDFC Mutual Fund to deal with the liquidity crunch owing to their exposure to the non-convertible debentures (NCDs) issued by companies promoted by Essel Group.
This liquidity arrangement will only apply in case of FMPs with an exposure to the NCDs issued by the Essel group companies and have either already matured in April or will mature till the standstill arrangement with Essel group is in force, said HDFC Mutual Fund said in a statement.
"The liquidity arrangement may involve an aggregate outlay not exceeding INR 500 crores and will be put in place shortly," said the company in a regulatory filing dated June 17.
FMPs are close-ended funds with a fixed maturity period. Several AMCs have exposure to Essel Group companies, including in FMPs and open-ended debt funds, and troubles with the promoters of Zee Entertainment Enterprises have rocked the debt markets.
HDFC AMC is a joint venture between Housing Development Finance Corporation and Standard Life Investments.