HDFC Asset Management Company ( HDFC AMC) has provided a liquidity arrangement to certain fixed maturity plan (FMP) schemes of HDFC Mutual Fund to deal with the illiquidity faced by such schemes, the fund house said in a statement to the exchanges.
Certain FMPs has an exposure to the Non-Convertible Debentures (NCDs) issued by Essel Group-promoted companies Edisons Infrapower & Multiventures and Sprit Infrapower & Multiventures.
“This liquidity arrangement shall only apply in case of FMP schemes (having an exposure to the NCDs issued by the Essel Group Companies) which have either already matured in the month of April 2019 and/ or will mature till the standstill arrangement entered into by the Company with Essel Group Companies is in force,” the statement read.
The fund house said that the provision of such liquidity arrangement will entail acquisition by the Company of NCDs issued by the Essel Group Companies held by such FMP schemes at the prevailing valuation as on respective maturity/purchase dates.
The liquidity arrangement may involve an aggregate outlay not more than Rs 500 crore and will be put in place shortly.
“Provision of this liquidity arrangement is without prejudice to the validity of the Company’s action of entering into the abovementioned standstill arrangement,” it said.
“Such liquidity arrangement is in the larger long term interest of the Company and is being undertaken purely as a measure to provide liquidity to the relevant unitholders,” the statement added.