Five wound-up Franklin Templeton Mutual Fund schemes have received Rs 146 crore of interest payment from Vodafone Idea, that was due on 3 September. Investors of these schemes will receive these flows into their accounts in the next few days in proportion to their holdings in the plans of the segregated portfolio.
Side-pocketing or segregating portfolio is an MF jargon to mean restructuring of the scheme when debt in the scheme is downgraded below investment grade (rating below BBB-) or defaulted so that only investors exposed to the scheme on the day of credit event, can benefit from the subsequent recovery of dues and also any improvement in the credit profile.
Vodafone Idea's debt instruments were downgraded after Supreme Court's (SC) ruling on additional gross revenue (AGR) dues as it created a liability of more than Rs 44,000 crore for the telecom operator.
The schemes that received these interest payments on Thursday include Franklin India Low Duration Fund, Franklin India Short Term Income, Franklin India Credit Risk Fund, Franklin India Dynamic Accrual Fund and Franklin India Income Opportunities Fund.
In June, Vodafone Idea also paid dues on a different tranche of securities, which were also held by these schemes.
Recently, the AMC announced that it had received another Rs 1,498 crore from maturities, pre-payments and coupon payments in two weeks (between 15 August and 31 August 2020).
As of 31 August, the total cash flows received stood at Rs 6,486 crore since the AMC had announced the wind-up of six of its debt schemes in April.