HDFC AMC, Nippon Life AMC shares fall up to 17% after Franklin Templeton MF shuts debt schemes
Aseem Thapliyal April 24, 2020
Share prices of HDFC Asset Management Company and Nippon Life India Asset Management tumbled up to 18% in afternoon trade today amid news that one of country's oldest asset management companies Franklin Templeton Mutual Fund has decided to wind up its six debt schemes effective from April 23, 2020. This will result in locking in of Rs 30,800 crore of investor wealth.
With investors withdrawing money to meet expenses and minimising losses during the coronavirus crisis, industry's listed players HDFC Asset Management Company and Nippon Life India Asset Management saw their stocks tumbling in a weak market.
While share price of HDFC Asset Management Company fell 8.59% to Rs 2,368.05 intra day, that of Nippon Life India AMC crashed up to 18.22% to Rs 215.2 on BSE. HDFC Asset Management Company share opened with a loss of Rs 2.26% at Rs 2532 against previous close of Rs 2,590 on BSE.
Since then, the stock has been trading in red. The stock closed 6.38% or 165 points lower at Rs 2,425 on BSE. The large cap stock has lost 13.83% in last 4 days. The stock stands higher than 20 day moving averages but lower than 5 day, 50 day, 100 day and 200 day moving averages. However, during the last one year, the stock has gained 51.78%. It has fallen 24.45% since the beginning of this year.
Nippon Life India Asset Management stock was the biggest loser on account of weak sentiment in the industry after closure of Franklin Templeton Mutual Fund debt schemes. Nippon Life India Asset Management stock closed 17.48% or 47 points lower at Rs 216.25 on BSE. The large cap stock opened with a loss of Rs 3.48% at Rs 254 against previous close of Rs 263.15 . Since then, it was trading in the red.
The stock stands lower than its 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The six funds being winded up are Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund.
After winding up of schemes, existing investors will not be able to withdraw funds, buy fresh units, transfer to equity schemes or make systematic withdrawals to meet their monthly expenses.