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HDFC AMC slides after providing liquidity for certain FMP schemes

Capital Market 

HDFC Asset Management Company fell 4.89% to Rs 1835.35 at 9:26 IST on the BSE after the company said it will provide a liquidity arrangement of up to Rs 500 crore to certain fixed maturity plans to deal with illiquidity.

The announcement was made after market hours yesterday, 17 June 2019.

Meanwhile, the S&P BSE Sensex was up by 110.62 points, or 0.28% to 39,071.41.

On the BSE, 13000 shares were traded in the counter so far compared with average daily volumes of 27,000 shares in the past two weeks. The stock had hit a high of Rs 1895 and a low of Rs 1832.70 so far during the day. It hit a 52-week high of Rs 1,969.50 on 27 August 2018 and a 52-week low of Rs. 1,248.30 on 21 September 2018.

HDFC Asset Management Company (HDFC AMC) said it has decided to provide a liquidity arrangement to certain fixed maturity plan (FMP) schemes of HDFC Mutual Fund, to deal with the illiquidity faced by such FMP schemes due to their exposure to the non-convertible debentures (NCDs) issued by Edisons Infrapower & Multiventures and Sprit Infrapower & Multiventures, companies promoted by the Essel Group (collectively "Essel Group companies").

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. 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 exceeding 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. 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.

On a consolidated basis, HDFC AMC's net profit rose 60.70% to Rs 276.17 crore on 9.51% rise in the total income to Rs 547.45 crore in Q4 March 2019 over Q4 March 2018.

HDFC AMC is an asset management company.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, June 18 2019. 09:19 IST