Franklin Templeton Mutual Fund’s six debt funds – which are under winding up – received Rs 698 crore from maturities, pre-payments, and coupon payments during the period September 1-15. This takes the total cash flows received to date from April 24 to Rs 7,184 crore as on September 15.

Franklin India Ultra Short Bond Fund (FIUBF), Franklin India Dynamic Accrual Fund (FIDA), Franklin India Low Duration Fund (FILDF) and Franklin India Credit Risk Fund (FICRF) have 35%, 17%, 9% and 2% of their respective AUM available in cash to distribute to unitholders subject to a successful unitholder vote. Borrowing levels in Franklin India Short Term Income Plan (FISTIP) and Franklin India Income Opportunities Fund (FIIOF) continue to come down steadily.

Essel/Zee update

Further to the decision of the Delhi High Court, the Debenture Trustees sold the entire shares of Zee Entertainment Enterprises Ltd. and recovered Rs 92.35 crore (across 4 schemes) which is slightly higher than the value at which the Essel Infraprojects NCDs were valued in these schemes. “We will continue our efforts to recover the outstanding investment proceeds in the best interest of the unitholders,” Franklin said.

As things stand now, below is a graphic of the maturity profile of each scheme and how soon they can return money to investors if the schemes only pay you when the maturity of securities occurs.

Update on 6 debt funds

1. Franklin India Ultra Short Bond Fund

The Rs 9,966-crore Franklin India Ultra Short Bond Fund is a cash-positive scheme and it can return 35% of the respective AUM available in cash to unitholders subject to a successful unitholder vote. Between September 1 to 15, a total of Rs 380 crore was realised by the ultra-short duration fund from maturity receipt, payment from HPCL-Mittal Energy, Pune Solapur Expressways and PNB Housing Finance.

In terms of top-5 group wise exposure, Franklin Ultra Short Bond Fund is most exposed to CLIX 9.29%, followed by Indostar 8.29%, Edelweiss Capital 7.43%, JM Financial 5.43% and Tata 4.82%.

2. Franklin India Low Duration Fund

The borrowing situation for Rs 2,454-crore Franklin India Low Duration Fund has changed to cash-positive. It can return 9% of respective AUM now. Between September 1 to 15 the scheme saw Rs 49.25 crore coming in from Pune Solapur Expressways as payments. Also, there was partial recovery from Essel Infra for Rs 43.87 crore.

In terms of top-5 group wise exposure, Franklin India Low Duration Fund is most exposed to Renew 16.16%, followed by JM Financial 14.24%, Vedanta 9.92%, Esskay 8.52% and Small Business Fincredit 7.13%.

3. Franklin India Short Term Income Plan

This is the 2nd biggest debt fund among the six schemes being proposed to be shuttered by the AMC. The Rs 5,166-crore Franklin India Short Term Income Plan remains one of the highest leveraged schemes in terms of borrowings. As a percentage of AUM, outstanding borrowings are 23% for the fund. The scheme received Rs 29.27 crore as partial recovery from Essel.

In terms of top-5 group wise exposure, Franklin India Short Term Income Plan is most exposed to Shriram Transport 14.70%, followed by Renew 12.86%, Edelweiss Capital 10.40%, UP Power Corporation 10.35% and Andhra Pradesh Capital Region Development Authority 9.30%.

4. Franklin India Income Opportunities Fund

The Rs 1,575-crore Franklin India Income Opportunities Fund is the highest leveraged scheme among the six being shuttered. About five months since the winding up announcement, the fund as a percentage of AUM has outstanding borrowings of 33%. The scheme received Rs 67.33 crore from securities matured/ sold/ prepaid between September 1 to 15. Money was received from Pune Solapur Expressways.

In terms of top-5 group wise exposure, Franklin India Income Opportunities Fund is most exposed to Ajay Piramal 16.06%, Tata 14.42%, Shriram Transport 12%, UP Power Corporation 11.59% and Hinduja 8.11%.

5. Franklin India Credit Risk Fund

The Rs 3,397-crore Franklin India Credit Risk Fund turned cash-positive sometime back. It can return 2% of AUM as cash to investors. The scheme received Rs 15.52 crore from Essel Projects as partial recovery.

In terms of top-5 group wise exposure, Franklin India Credit Risk Fund is most exposed to Shriram Transport 12.93%, followed by UP Power Corporation 10.08%, Andhra Pradesh Capital Region Development Authority 9.08%, Five Star Business Finance 7.16% and Kedara Capital 6.82%.

6. Franklin India Dynamic Accrual Fund

The Rs 2,427-crore Franklin India Dynamic Accrual Fund also does not have outstanding borrowings. As a cash-positive fund, it can immediately return 17% of AUM once the e-voting on winding up is cleared.

The scheme received Rs 75.78 crore from Power Finance Corp. and Pune Solapur Expressways between September 1 and 15. It also got Rs 3.66 crore as partial recovery from Essel Infra Projects.

In terms of top-5 group wise exposure, Franklin India Dynamic Accrual Fund is most exposed to Shriram Transport 10.19%, followed by Ajay Piramal 7.94%, UP Power Corporation 7.46%, Vedanta 6.89% and Renew 6.65%.

Staff Writer

This article is written by RupeeIQ editorial staff.

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