Franklin Templeton India will launch a new equity fund offer (NFO) for the first time in 10 years to revive business which was hit by the debt crisis two years ago.
The NFO on Balanced Advantage, which will open for subscription on August 16, intends to generate long-term capital appreciation and income generation by investing in a dynamically-managed portfolio of equity and equity-related instruments, fixed income and money market instruments.
Avinash Satwalekar, President, Franklin Templeton India, said the diversified investment offering will help investors navigate through changing markets in a simple and efficient manner.
Liquidity crisis in 2020
In 2020, buckling under huge liquidity crisis amid Covid break, Franklin Templeton India shocked investors by abruptly winding up six of its debt funds after facing massive redemptions and illiquid portfolios. Despite facing flak from SEBI and being dragged to the Supreme Court, the fund house sold assets held by the schemes and returned ₹26,098 crore to investors against the AUM of ₹25,215 crore when the six funds were closed in April 2020.
“SEBI has been very accommodative and cleared our application for the NFO in 45 days after filing. Given the gaps in our equity offerings, we have been internally discussing to come out with five new funds,” he said.
Asked about the feedback from investors on the offer, he said, “Their confidence in Franklin India has revived partly after returning more than what they had invested in our debt schemes, but gaining investors’ confidence will be a work in progress for us”.
Inflation worries should subside soon
Anand Radhakrishnan, MD and CIO (Emerging Markets Equity - India), Franklin Templeton, said though there are headwinds, inflation worries in India should subside by September and strong credit growth should improve performance of banking and financial sectors including life and general insurance companies.
Falling raw material prices should help consumer durables, including white goods companies, and discretionary spending should boost auto, hotels and tourism sectors, he said.