HDFC AMC shares tank nearly 7 pc

Shares of HDFC Asset Management Company fell nearly 7 per cent Tuesday as the firm decided to provide liquidity to certain fixed maturity plan schemes of HDFC MF to deal with a cash crunch. In a BSE filing on Monday, HDFC AMC said it has decided to provide a liquidity arrangement to certain fixed maturity plan schemes of HDFC MF to deal with the illiquidity faced by such FMP schemes due to their exposure to NCDs issued by Essel Group firms.

The NCDs were issued by Edisons Infrapower & Multiventures and Spirit Infrapower & Multiventures. The scrip tanked 6.66 per cent to Rs 1,801.05 on the BSE.

At the NSE, shares plunged 6.81 per cent to Rs 1,800. In recent months, the mutual fund industry has been grappling with redemption pressure in the wake of the debt crisis at various groups, including IL&FS, Essel and DHFL.

This liquidity arrangement shall only apply in case of FMP schemes which have either already matured in April 2019 and/or will mature till the standstill arrangement entered into by the company with Essel Group companies is in force, it said. "The liquidity arrangement may involve an aggregate outlay not exceeding Rs 500 crore and will be put in place shortly," the filing added.

Such liquidity arrangement is in the larger long-term interest of the company and is being undertaken purely as a measure to provide liquidity to the relevant unitholders, it said.