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Franklin plans’ NAVs slip post Essel Infra downgrade

​Four schemes of Franklin Templeton have an exposure of ₹493.3 cr to Essel firm, as per data.

, ET Bureau|
Updated: Dec 07, 2019, 10.35 AM IST
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The NAV of Franklin India Low Duration with a 4.11 per cent exposure fell the maximum at 1.98 per cent.
Mumbai: The net asset value (NAV) of four debt schemes of Franklin Templeton Mutual Fund fell in the range of 0.39 per cent to 1.98 per cent in a single day on Dec 5, after the fund house marked down its exposure by 50 per cent in Essel Infraprojects.

This happened after Brickwork Ratings downgraded bank facilities of Essel Infraprojects worth ₹1,832.42 crore to D (default) on the grounds that the issuer was not co-operating with the ratings agency.

Four schemes of Franklin Templeton cumulatively have an exposure of ₹ 493.3 crore to Essel firm, as per data from Rupeevest. The NAV of Franklin India Low Duration with a 4.11 per cent exposure fell the maximum at 1.98 per cent, Franklin India Short Term with 1.25 per cent exposure fell 0.76 per cent, Franklin India Credit Risk with 1.25 per cent exposure lost 0.77 per cent and Franklin Dynamic Accrual with 0.49 per cent exposure lost 0.39 per cent.

“Brickwork Ratings took up the issue with Essel Infraprojects several times seeking information. Despite the best efforts of BWR to get at least the minimum required information for a review, the entity has not provided the same. In the absence of adequate information from the company, BWR is unable to assess the company’s financial performance, its ability to service its debt and maintain a valid rating,” the rating agency said in a note.

“In our talks with the fund house, we are given to understand that the exposure is backed by collateral of shares in Zee Entertainment and Dish TV and the said collateral is higher than the amount owed to them,” said a distributor with knowledge of the matter, who has clients invested in some of the above mentioned schemes.

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