Franklin Templeton India mutual fund will repay an amount of Rs 178.06 crore to investors of two of its wound-up debt schemes, starting June 14 across two of its schemes.
The fund house announced that it will pay off Rs 39.27 crore to investors of Franklin India Short Term Income Plan (FISTIP). It will also pay 138.79 crore to investors of Franklin India Credit Risk Fund (FICRF). The fund announced that the payment will be made electronically to all eligible unitholders by SBI MF.
After this payout, Franklin Templeton would have paid a cumulative amount to the tune of Rs 27109.34 crore. All the six schemes have paid more than 100 percent of the schemes' assets under management at the time of winding it up. While some of Franklin Templeton's exposures have defaulted on their debt obligations, several of its exposures continued to service the debt repayments and there were also securities that were sold at a profit. This has led to the cash distribution being over 100 percent.
Additionally, after this week's payout, Franklin Templeton mutual fund pays off all the debts of- and extinguishes units in- five of six debt funds. Only one scheme- FISTIP- would remain.
In April 2020, Franklin Templeton India Mutual Fund shocked investors when it abruptly wound up six debt funds. On April 23, 2020, the fund house announced that it was winding up the six debt schemes – Franklin India Ultra Short Bond Fund (FIUBF), Franklin India Low Duration Fund (FILDF), Franklin India Short Term Income Plan (FISTIP), Franklin India Income Opportunities Fund (FIIOF), Franklin India Credit Risk Fund (FICRF) and Franklin India Dynamic Accrual Fund (FIDAF).
While the fund house has paid off all its unit holders of almost all the schemes, it continues to pay off as it recovers money that is stuck in securities earlier marked down to zero.
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