Franklin debt funds collect Rs 941 cr in Nov 1-15; Rs 814 cr came in as pre-payments
With the Rs 941 crore collected, the total cash flows received by the 6 debt schemes till date stands at Rs 9,682 crore.
Franklin Templeton Mutual Fund – whose six debt funds are under winding up – have collected Rs 941 crore from maturities, pre-payments, and coupon payments during the period October 30 to November 13. This is more than double of the Rs 438 crore collected in the previous fortnight October 16 to October 29.
With the Rs 941 crore collected, the total cash flows received by the 6 debt schemes till date now stands at Rs 9,682 crore.
Out of this total amount, the actual cash available stands at Rs 5,952 crore as of November 13, 2020 for the 4 cash positive schemes, subject to fund running expenses. So, investors can get some money back as and when the courts allow payouts from the schemes that are currently in the winding up process. Only those schemes which are cash positive can pay out in such a situation.
At the moment, there is no direction from courts to Franklin Templeton in terms of returning the free cash lying in schemes.
Prepayments are happening at a fast clip. Out of the received Rs 941 crore during the period October 30 to November 13, 2020, as much as Rs 814 crore was received as pre-payments.
Among the cash positive funds, Franklin India Ultra Short Bond Fund (FIUBF), Franklin India Low Duration Fund (FILDF), Franklin India Dynamic Accrual Fund (FIDA) and Franklin India Credit Risk Fund (FICRF) have 43%, 27%, 26% and 8% of their respective AUM in cash.
Borrowing levels in Franklin India Short Term Income Plan (FISTIP) at 18% of AUM and Franklin India Income Opportunities Fund (FIIOF) at 30% of AUM continue to come down, but they are not cash positive yet.
Each scheme can return monies to investors only after paying all the obligations/ liabilities towards borrowings/ expenses/provisions.