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Franklin Templeton Mutual Fund Exits Exposure to JSPL Securities

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Franklin Templeton Mutual Fund Exits Exposure to JSPL Securities

New Delhi: Franklin Templeton Asset Management Company has completely exited its exposure to Jindal Steel and Power Ltd (JSPL) after downgrading of the debt papers of the Naveen Jindal-led group's firm. 

JSPL securities have been sold completely from its debt schemes in two tranches on February 29, and March 10, 2016, a spokesperson for the mutual fund said in an emailed response. 

After yesterday's transaction, debt schemes of Franklin Templeton Mutual Fund (MF) have 'nil' exposure to JSPL securities, he added. 

Franklin Templeton MF had an exposure of over Rs 1,600 crore to JSPL's debt papers. 

Crisil, which had last month downgraded the securities of JSPL resulting in decline in NAVs (net assets value) of mutual fund schemes with exposure to JSPL's debt papers, further downgraded the firm to 'default' grade. 

JSPL, which is into diverse segments including steel, cement and power, said in a recent investor presentation that it is focussing on reducing working capital and options to reduce interest costs. 

Other than Franklin Templeton MF, ICICI Prudential MF also had exposure to JSPL's debt papers and Reliance MF had an exposure of about Rs 49 crore to JSPL. 

An ICICI Prudential MF spokesperson had said that risk management and investment team at ICICI Pru understands its responsibility and the trust that investors have placed on us and we remain committed to it. 

"First and foremost, our exposure on the said company is very measured (0.31 per cent) as compared to our total debt funds under management. This is in line with our policy of not taking concentrated exposures," the fund house had said. 

The spokesperson further said that JSPL has serviced all its debt obligations in time. 

"The MF industry has seen repayments by the company of around Rs 2,260 crore in the last quarter. Further the capital market exposure of the company is limited as compared to its total debt which should enable that its debt obligations are met in due course," ICICI Prudential MF had said. 

A spokesperson of Reliance MF had said that the fund house has negligible exposure in the company and the security that fund holds has not been downgraded. 

Last year, JP Morgan MF got into trouble due to its exposure to debt securities of Amtek Auto.



(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)


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