What might return as a shock to investors of debt mutual funds, Kotak Mahindra investment firm, during a recent note to investors of Kotak FMP Series 183, said that nearly twenty seven per cent of the theme corpus of Rs 457 crore is invested with in 3 troubled entities facing severe liquidity crisis: IL&FS Transportation Networks restricted (ITNL), and 2 Essel cluster firms (Edisons Utility Works and Konti Infrapower & Multiventures).
With over 1 / 4 of the invested with corpus stuck at the time of maturity of the theme, the fund house looked to reassure the investors by language that it's operating towards best recovery from 2 Essel group firms (with exposure of 19.24 per cent of the corpus). The fund house, however, further it's created full provision for investment in ITNL “as the recovery is unsure.”
Sources said whereas the fund house has exposure of around Rs 350 crore through eight mounted maturity plans (FMPs) to the Essel group, it had invested with around Rs eighty five crore in ITNL. Of the eight FMPs that raised around Rs 2,000 crore, 2 FMPs that raised around Rs 790 crore have already matured.
As the Essel group moon-faced debt compensation crisis, letter Entertainment’s share costs fell steeply on January twenty five, 2019. Over the subsequent days promoters of Essel cluster control deliberations with lenders together with mutual funds and NBFCs wherever a majority of lenders determined to not declare event of default because it might end in steep fall in worth given panic marketing within the letter diversion thereby wearing away collateral price and leading to sub-optimal recovery.
“Essel promoters are operating for resolution of on top of through a strategic sale of letter …. possible to be achieved by September thirty, 2019 as per communication from Essel promoters,” said the fund house.
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