Page 16 - Banking Finance August 2019

MUTUAL FUND

PPFAS Mutual Fund brings Parikh Tax Saver Fund
MF houses hold Rs 3,494
PPFAS Mutual Fund has recently brought a new scheme - Parag Parikh Tax Saver
crore in Yes Bank’s pa- Fund. It is an open-ended Equity Linked Savings Scheme
pers further downgraded (ELSS) with a statutory lock-in period of three years. The
fund house in a press release stated that the scheme aims
As much as 11 mutual fund houses
hold Rs to generate long-term capital appreciation through a di-
3,494 versified portfolio of equity and equity-related securities.
crore in The new fund offer opened for subscription on July 4 and closed on July 18 2019.
Yes Bank The minimum initial investment in the scheme was Rs 500 and multiples of Rs
papers 500 thereafter. The scheme is slated to reopen on July 26. The scheme
which got benchmarked against Nifty 500 TRI and managed by Rajeev Thakkar, Raunak
downgraded again, as per the data Onkar and Raj Mehta. “We had been receiving repeated requests for an ELSS
from MFI Explorer. The Yes Bank Scheme for the past few years. However, we chose to wait until we attained a
papers have been downgraded by certain number of investors. We are gratified that a little more than one lakh
ICRA twice since May. investors have chosen to invest in our flagship equity Scheme, which we believe
ICRA downgraded Basel III Additional is a validation of our philosophy and approach to managing money. Consequently,
Tier I Bond from A (negative) to we concluded that this was an opportune time to launch our ELSS,” Neil Parag
BBB+ (negative) and Basel II Lower Parikh, Chairman and CEO, PPFAS Mutual Fund said.
Tier II Bond from AA- (negative) to According to the press release, the scheme will invest minimum 80% of its cor-
A+ (negative). Among the 11 asset pus in equities and maximum 20% will be invested in debt instruments and
management companies, Reliance money market instruments.
Mutual Fund has the highest expo-
“Our flagship scheme Parag Parikh Long Term Equity Fund allows us to invest up
sure of Rs 2,216 crore in the troubled
Yes Bank papers. to 35% in the overseas market. However, an ELSS does not permit us to invest
abroad. Besides, I don't think there will be any change in our investment ap-
Some of the schemes that had expo- proach and philosophy. We can invest in stocks of all sizes, sectors wherever we
sure to the downgraded papers find value. We can also participate in buy-backs and other special situations,”
were: Reliance Credit Risk Fund with Rajeev Thakkar, Chief Investment Officer, PPFAS Mutual Fund said.
Rs 578 crore exposure (7.2% of the
scheme’s total AUM), Reliance Eq- Stake claim to Zee deal gains likely by Mutual Funds
uity Hybrid Fund has Rs 707 crore
(6.5% of its AUM) And Reliance Stra- Mutual funds holding Zee Entertainment shares as collateral for loans given to
tegic Debt Fund with an exposure of Essel Group promoters are likely to stake claim to the
Rs 507 crore (12% of the total AUM). Rs 4,224 crore the company will increase by selling
Other AMCs with a higher exposure 11% in its media unit to Invesco Oppenheimer.
to the papers are Franklin Templeton Proceeds from the stake sale amount to 50-55% of
and UTI. the money owed to mutual funds (MFs). The group
ICRA further stated, “The bank’s abil- has unofficially told MFs holding the pledged shares that it could offload a fur-
ity to resolve these advances in a ther 10% to another investor in August to repay the balance of what it owes,
timely manner will remain a key said three people familiar with the matter.
driver of its asset quality, profitabil- “If the waterfall mechanism is applied, MFs holding Zee shares should be repaid
ity and capital position. YBL’s ability first,” said a senior MF industry official. In a waterfall mechanism, highertiered
to reduce its GNPAs plus BB and be- creditors receive interest and principal payments before the lowertiered ones
low rated exposures, improve the do. Another official of a fund house that has lent to Essel said there is no con-
CET-I capital cushion and diversify the flict because the group has committed to pay the rest of the money it owed
advances and liabilities will result in funds before September 30. “If all the money is being returned before the dead-
a change in the outlook to Stable line, there is no dispute regarding the payment schedule,” said the official,
from Negative.” downplaying the possibility of a dispute.

16 | 2019 | AUGUST | BANKING FINANCE