Franklin Templeton India's six shut funds have received Rs 3,275 crore from maturities, pre-payments and coupon payments since the announcement of their winding up in April.
In a letter to the investors, Sanjay Sapre, President, Franklin Templeton Asset Management (India), has said that during June 16-30, the schemes received Rs 1,311 crore.
"The six schemes under winding up continue to receive cash flows and we have some good progress to report in this regard. From June 16, 2020 to June 30, 2020, the schemes have received an additional Rs 1,311 crore from maturities, pre-payments, and coupon payments. This takes the total amount received since April 24, 2020 to Rs 3,275 crore," Sapre said.
He noted that this amount has been received without the ability to efficiently monetise assets. The schemes will endeavor to accelerate monetisation post the successful completion of the e-voting exercise and the unit holder meets, he added.
The President also said that the mutual fund house has received a pre-payment of Rs 420 crore from Nuvoco Vistas Corporation Ltd (NVCL) across two securities in Franklin India Ultra Short Bond Fund and Franklin India Dynamic Accrual Fund. The issuer has prepaid both these securities in June 2020, which were to mature in September 2020 and September 2021, respectively.
"As I had updated you in my last communication, Franklin India Ultra Short Bond Fund & Franklin India Dynamic Accrual Fund had fully repaid their borrowings and are cash positive. As of June 30, 2020, Franklin India Ultra Short Bond Fund has 13 per cent and Franklin India Dynamic Accrual Fund has 4 per cent of their AUM available to distribute to unit holders," the letter to the investors said.
Sapre noted that the company would be able to return money to the investors after the completion of the e-voting exercise and the unit holders' meet.
Regarding concerns on drop in NAV on June 30, he said that it is the result of a maturity date reset for the securities of Edelweiss Rural & Corporate Services Limited (ERCSL).
The independent valuation agencies typically value these interest rate reset securities considering the next interest rate reset date as the maturity date, he said, adding that the impact on the NAV is due to valuation provided by the valuation agencies due to reset of maturity date to the next rate reset date, June 30, 2022.
Franklin Templeton is continuously monitoring the developments in this regard and engaging with the issuer for early repayments, he said.
He further said: "We have also noticed certain factually incorrect and biased reports circulating on WhatsApp and other platforms which mention that investors could face a loss of over Rs 20,000 crore in the schemes under winding up.
"We strongly refute these misleading allegations, and while it is difficult to stop such news from circulating, we wish to once again clarify that winding-up of a scheme does not mean there has been any kind of write-off of investments made by the schemes."
Sapre also informed the investors about the full payment by Vodafone Idea on a segregated portfolio.
"I am happy to inform you that further to the annual interest payment received on June 12, 2020 for the security ‘8.25 per cent Vodafone Idea Ltd. (10-July-2020)' held in the segregated portfolios of the six schemes under winding up, we have now received the full value of the principal due, along with interest for the period June 12 to July 9, 2020," he said.
This amount will be distributed to the unit holders of the segregated portfolio, he said, adding that this is the full and final payment for this segregated portfolio and will be made by extinguishing all the outstanding units held by each unit holder therein.
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