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Investors of HDFC AMC’s FMPs exposed to Essel get a breather, but don't miss the woods for the trees

Updated : June 21, 2019 04:08 PM IST

HDFC AMC’s decision to provide a 'liquidity arrangement' for investors of Fixed Maturity Plans (FMPs) impacted by the exposure to Essel Group can be justified because it is the fiduciary responsibility of an Asset Management Company (AMC) to protect the interests of investors.
Not paying full monies due required by the contract would open up the AMC to regulatory action and loss of trust at the hands of the investor.
But there are many things left unsaid, especially about how FMPs carry a contractual date of maturity and that investors were not aware until the eve of maturity that monies would be held back.
Investors of HDFC AMC’s FMPs exposed to Essel get a breather, but don't miss the woods for the trees

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