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Aditya Birla Sun Life Mutual Fund side-pockets Essel Group’s exposure in 3 schemes

Side-pocketing allows fund houses to separate bad assets from other liquid investments in a debt portfolio which may get impacted by the credit profile of the underlying instruments

November 26, 2019 / 07:37 PM IST

Aditya Birla Sun Life Mutual Fund has segregated the exposure of Subhash Chandra-led Essel Group’s infra company in three schemes on November 25, the fund house said in a press release.

The decision to side-pocket the investment was taken after the company had failed to repay investors.

Side-pocketing allows fund houses to separate bad assets from other liquid investments in a debt portfolio which may get impacted by the credit profile of the underlying instruments.

The three schemes are--Aditya Birla Sun Life Medium Term Plan, Aditya Birla Sun Life Credit Risk Fund and Aditya Birla Sun Life Dynamic Bond Fund that had exposure to NCDs (non-convertible debentures) of Essel Group firm, Adilink Infra & Multitrading Private Ltd.

The three schemes have exposure of 7.5 percent, 3.7 percent and 5.6 percent to the NCD of Adilink Infra & Multitrading Pvt Ltd. In value terms, the exposures stood at Rs 419.04 crores, Rs 212.93 crores and Rs 160.70 crores which add up to Rs 792.67 crore.

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On the other hand, ICICI Prudential Mutual Fund and HDFC Mutual Fund received payment from Essel Group for its investment in NCDs of Essel Group companies.

HDFC Mutual Fund received a total of Rs 167 crore while ICICI Prudential AMC received Rs 267 crore from the Group.
Moneycontrol News
first published: Nov 26, 2019 07:37 pm

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