Franklin debt funds investors to get back Rs 2,488 cr in week starting May 3
Unitholders in the six debt mutual funds being wound up by Franklin Templeton MF will be getting another payment.
SBI Funds Management Pvt. Ltd. (SBI MF), which has been appointed by the Supreme Court to distribute money in those schemes, would be distributing the next tranche of Rs 2,488.75 crore to unitholders across all six schemes.
The payment to all investors whose accounts are KYC compliant with all details available will be made during the week of May 3, 2021, Franklin MF has informed distributor partners in an official communique.
The amount to be paid to unitholders will be calculated as per the below table and will be paid by extinguishing proportionate units at the NAV dated 30 April 2021.
Accordingly, the units held by the investors in the scheme will reduce to that extent.
Do note that NRI investors will receive their payment after deduction of TDS.
The payment will be made electronically to all eligible unitholders by SBI MF.
In case the unitholdersâ€™ bank account is not eligible for an electronic payment, a Cheque/Demand Draft will be issued and sent to their registered address by SBI MF.
Further, unitholders whose distributable amounts are less than Re.1 will not receive any payments.
Here is an Illustration:
Scheme & Plan name: FIUBF-Retail Plan Growth Option
As on 30 April 2021 and prior to extinguishment
Portfolio value: Rs 100,000 (A)
NAV per unit: 28.3574 (B)
Units prior to extinguishment: 3526.416 [100,000 / 28.3574] (C) = (A / B)
Payout percentage: 20.38% (D)
Payout amount : INR 20,380 (E) = (A x D)
Units extinguished : 718.684 (C x D) or (E / B)
Background – Franklin Templeton MF in April 2020 froze redemptions in 6 debt funds citing market illiquidity due to Covid situation. This was an unprecedented step and stirred up huge controversy.
The 6 schemes in question are Franklin India Ultra Short Bond Fund, Franklin India Low Duration Fund, Franklin India Short Term Income Plan, Franklin India Credit Risk Fund, Franklin India Dynamic Accrual Fund and Franklin India Income Opportunities Fund.
The case went to the Supreme Court and now money is being returned from the 6 funds to unitholders under the watchful eyes of the top court.