Franklin Templeton's six wound-up schemes face concentration risks

Closed schemes had large exposure to some bond issuers

Franklin Templeton MF
STFC debt papers held by Franklin are graded by domestic rating agency Crisil, which is yet to revise its ratings on these papers.

The six wound-up debt schemes of Franklin Templeton Mutual Fund (MF) have concentrated exposure to certain companies in the non-banking financial, asset reconstruction, and renewable energy sectors. This closely ties up fortunes of investors with how these companies weather challenges presented by the Covid-19 pandemic and the lockdown. At the individual scheme level, three of the wound-up schemes have 9-10 per cent exposure to Shriram Transport Finance (STFC), which saw its long-term issuer rating downgraded by Fitch Ratings recently to factor in the asset-quality risks the ...