Fortnightly collections for 6 Franklin debt funds drop by 70%
However, NAVs of all schemes were higher vis-à-vis their respective NAVs on April 23, 2020, the fateful date on which the winding up decision was taken
The six debt funds proposed to be wound up by Franklin Templeton Mutual Fund have collected Rs 183 crore in the fortnight ended February 15, almost 70% less than Rs 602 crore collected in the January 16 – 29 period. Certain lumpiness has been noticed in the funds collections previously as well because in some periods pre/repayments are significant while in some periods they are quite low.
The six schemes have received total cash flows of Rs 14,573 crore so far from maturities, coupons and prepayments. We are not giving the AUM or cash levels of schemes for the fortnight because payments were started on Monday and the figures provided by Franklin are as on February 15.
The big news this week, however, was about FT making some payments to unitholders. Payment to all investors whose accounts are KYC compliant with all details available has been made by SBI Funds Management Pvt. Ltd. (SBI), Franklin said.
While the five cash positive schemes (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 distributed cash of Rs 9,122 crore available as of January 15, 2021, the balance amount will be distributed in tranches without waiting for liquidation of all securities in the portfolio. The only scheme with borrowings (sub 5%) is Franklin India Income Opportunities Fund.
“We have initiated discussions with SBI and will keep you informed about progress made on monetization,” Franklin Templeton MF said.
Fortunately, the NAVs of all the six schemes were higher as on February 15, 2021 vis-à-vis their respective NAVs on April 23, 2020, the date on which the winding up decision was taken.
The Supreme Court, in its order dated 12 February 2021, upheld the results of the e-voting under regulation 18(15)(c) held in December 2020 and confirmed the winding up of the six schemes. The apex court also appointed SBI Funds Management as the authorized person under regulation 41 to take next steps on monetization.
In April last year, Franklin shut down subscriptions and redemptions while proposing to wind up the six debt schemes citing Covid-induced illiquidity in credit markets.