The debt schemes that have exposure to Non-Convertible Debentures (NCDs), HDFC Mutual Fund has decided to buy Rs 500 crore worth of NCDs of the Essel Group.
Late Monday Evening, the fund house, in a disclosure to stock exchanges, said it will repay investors in fixed maturity plans (FMPs) that hold Essel-issued securities and are due for maturity until September.
The move removes uncertainty among investors, who were concerned that they might not get back their entire investments in case the Subhash Chandra-controlled group failed to sell some of its assets and repay lenders before September.
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Late January, asset managers including HDFC MF had agreed not to sell shares of Zee EntertainmentNSE 3.08 percent they held as collateral and gave time to Essel until September to repay debts. Mutual funds collectively held Rs 7,000 crore worth of Essel papers.
The asset manager in a statement to the exchanges said, “this liquidity arrangement shall only apply in case of FMP schemes (having an exposure to the NCDs issued by the Essel Group), which have either already matured in the month of April 2019 and/or will mature until the standstill arrangement entered into by the company with Essel Group is in force.”