Most MFs with debt exposure to Essel Group had entered into a ‘standstill’ agreement with the promoters, which effectively extended the maturity of these debt papers to September. Quite a few FMPs of HDFC MF
and Kotak MF were maturing before the extended time line given to the Essel Group promoters.
However, both fund houses have maintained that the decision to give more time to Essel promoters to repay was keeping in mind the interests of the investors.
Recently, reports of Japanese major Sony reviving talks with Zee to buy large stake in the latter suggested the decision taken by fund houses is likely to pay off.
Industry officials feel the prospects of a deal have improved. “Prospects of the deal have improved after elections and strong quarterly results reported by Zee,” said a senior official of one of the fund houses with loan against share exposures to Essel Group firms.
As of March 31, 2019, the overall debt exposure of MF industry to Essel group firms stood at Rs 6,779 crore, showed data from Value Research.