Over Rs 8,000 crore of the total exposure is currently held by 150 debt schemes by the top fund houses.
Indian fund houses have an exposure of about `11,000 crore to the Essel Group companies, both on equity and debt sides. Over `8,000 crore of the total exposure is currently held by 150 debt schemes by the top fund houses.
Aditya Birla Sun Life Mutual Fund has investments of around `2,936.24 crore in various group companies of Essel Group across 28 debt schemes, while HDFC Mutual Fund has an exposure of `1,195.64 crore. data from B&K Securities show.Franklin Templeton has invested around `1,008.96 crore in nine debt schemes on Essel Group companies., according to the data.
On the other hand, equity mutual funds have invested `2,719.43 crore in the stock of Zee Entertainment Enterprises as on December 2018. Another group company, Essel Propack, and Dish TV India have got investments by mutual funds of `75.04 crore and `122.86 crore, respectively. Mutual funds hold `37.38 crore in the stocks of Siti Networks as on December 2018.
On Friday, shares of Zee Entertainment had crashed by 26.4% to `319.35 on reports of involvement in demonetisation-linked transaction, which was later denied by the company.
In an open letter, Subhash Chandra, chairman of Zee and Essel Group, had expressed difficulties in repaying its lenders last week. However, on Monday, shares of Zee Entertainment rebounded and ended the day at `372.5 up by 16.6% after Essel Group’s management successfully arrived at an understanding with lenders who have pledge on shares held by the promoters.
A Balasubramanian, CEO of Aditya Birla Sun Life AMC, said: “We have always believed in the intrinsic value of ZEE Entertainment and most above, the sheer value system with which its promoters function. I am very glad with the outcome of the meeting which enabled us to arrive at a consensus in the interest of all stakeholders.”
Senior officials in the MF industry said right now fund houses have not marked down any of the investments as they have not yet downgraded. “We have to wait for a few more days as there has been reiteration by the promoters for a speedy resolution through a strategic sale in a time-bound manner,” said a senior fund manager on condition of anonymity.
Data from B&K Securities also show that fund houses such as Reliance Mutual Fund, Kotak Mutual Fund and ICICI Prudential Mutual Fund and UTI among others have invested in various debt instruments of Essel Group companies.
B&K Securities specializes in advising to the treasuries of corporate and institutional investors and have been awarded as India’s best in their field for the last three years in a row.