Mumbai: Shareholders of HDFC Mutual Fund received a jolt when the company informed stock exchanges late Monday about its decision to transfer Rs 500 crore worth of its non-convertible debenture (NCD) exposures to Essel Group companies on to its own books.
Shares of HDFC Asset Management Company, which had run up sharply in the past few weeks, fell 6.32 per cent on Tuesday, closing at Rs 1,807.75.
The stock dipped to a low of Rs 1,800.55 intra-day. The asset management company’s investors saw their collective share value coming down by Rs 2,593.39 crore from the stock’s decline by Rs 122 per share. In the last one week, HDFC AMC’s stock was trading near its 52-week high of Rs 1,969 touched on August 2018. Interestingly, in less than month, its shares had plunged to a 52-week low of Rs 1,248.30 on September 21, 2018, coinciding with the IL&FS crisis.
Market participants largely welcomed HDFC Mutual Fund’s action as a stop-gap measure to tide over the crisis of bad exposure by the fixed maturity plans (FMPs), though the social media witnessed an outrage over the fund’s decision, terming it as a give-away at the cost of investors in the fund.
On Monday, after the market hours, HDFC AMC informed the exchanges about the allocation to FMPs facing liquidity problem.
“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. HDFC AMC said.
