In a audio communication shared with investors,
Santosh Kamath, CIO, India fixed income,
Franklin Templeton Mutual Fund, says that he expects the six wound up schemes to receive Rs 6,000 crore by September 30. These six schemes manage assets of Rs 26,000 crore. They have already received Rs 3,275 crore of cash in the form of prepayment, coupon and maturities and a further Rs 3,200 crore is expected to come between July and September without resorting to any secondary market sale.
Two of the schemes are cash positive and the borrowing levels have come down in four of the other schemes post April 23, when the fund house decided to wind up these six schemes.
Santosh Kamath points out that the overall credit appetite is not yet back to the level it was in January. However, it has improved with respect to April.
However, he believes the measures taken by the RBI resulted in liquidity increasing sharply. It used to have surplus liquidity of around Rs 3 lakh crore couple of months back it has moved to Rs 6.5 lakh crore.
“The risk appetite is not back in the system. Market continues to be risk averse and that is one area where things are deteriorating over couple of months as compared to improvement in other segments of the market” says Kamath. However, he is hopeful going ahead, with recent relief measures from the government and the RBI, there are signs of restarting in various sectors, which in turn could be positive for the overall economy.
As the economy limps back to normal over time, he is hopeful the fixed income markets will stabilize on the way forward and that could bring back risk appetite and help the fund house do secondary market sales.
The fund house has suspended the e-voting process required to start the unwinding of the schemes after the Gujarat High Court put it on hold. Subsequently, the Supreme Court has directed all petitions related to Franklin Templeton India shutting down six of its debt schemes from various high courts in the country to the Karnataka High Court and directed the court to hear the cases within three months.