HDFC AMC To Take Over Essel Group Debt from Its FMPs HDFC Asset Management Company (AMC), which manages the schemes under HDFC Mutual Fund, on Monday told its investors in fixed maturity plans (FMPs), that it will purchase up to Rs500 crore worth non-convertible debentures (NCDs) of Essel group companies held in the FMPs. The notice stated that the asset manager, “has decided to provide a liquidity arrangement to certain fixed maturity plan schemes of HDFC Mutual Fund to deal with the illiquidity faced by such FMP schemes due to their exposure to the non-convertible debentures issued by Edisons Infrapower & Multiventures Private Limited and Sprit Infrapower & Multiventures Private Limited, companies promoted by the Essel Group. Many fund houses who sold FMPs with a promise of high returns in debt securities found themselves unable to recover a portion of the schemes’ portfolio, which was exposed to the debt papers issued by Essel group companies. As a result, the Essel group got into a ‘standstill’ agreement with the mutual funds (MFs) in January this year, promising to resolve its financial troubles by September 2019. HDFC MF, which also has exposure to Zee group, told investors that it was extending the redemption date in some of its FMPs by a little over a year to 29 April 2020.
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