Tag: DSP Investment Managers

DSP MF moves court to secure ₹100 cr investment in Sintex NCD

Banking & Finance

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DSP Investment Managers has filed an intervention application with National Company Law and Tribunal (NCLT) to secure its investment of ₹100 crore in the non-convertible debentures issued by Sintex BAPL.

The move follows after Axis Bank declaratory suit claiming first charge over the proceeds from sale of assets by Sintex BAPL. DSP Investment Managers is the asset management company of DSP Mutual Fund.

DSP Credit Risk Fund had invested about ₹100 crore in the non-convertible debentures of Sintex BAPL in 2017. Subsequently, the company defaulted on its payment obligation and the fund house had written down the investment to ₹20 crore as of April-end.

Files case

DSP Investment along with other debenture holders had filed a petition before the Civil Court in Ahmedabad and was instrumental in getting the permission of Debenture Trustee Vistra ITCL (India) to sell the overseas business.

However, Axis Bank recently filed a fresh declaratory suit claiming first charge over the sale proceeds on the basis of an undertaking executed by Sintex in its favour.

In response, DSP Investment Managers has filed an intervention application opposing the grant of any relief to Axis Bank.

Further, the debenture holders claimed that Sintex must prepay the Debenture Holders out of the sale proceeds and the same were to be deposited in the Specified Bank Account (as defined under the Debenture Trust Deed) over which the Debenture Holders have first ranking exclusive charge.

Necessary documents were executed in favour of Debenture Trustee including making it exclusive signatory over the offshore account where sale proceeds are presently lying, sources said.

Earlier, an operational creditor had dragged Sintex Plastics Technology, the parent of Sintex BAPL, to NCLT over payment default. The company recently sold its step-down overseas subsidiary Sintex NP SAS for about ₹1,000 crore.

Sintex Plastics Technology filed an application in NCLT to withdraw insolvency proceedings. Following this, the asset management company filed an intervention petition opposing the move.

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Tata Asset Management, DSP Investment Managers and Axis Asset Management apply for licences

Banking & Finance

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Pension regulator PFRDA has received 10 applications including three from new ones for the Request for Proposal (RFP) it had floated for selection of sponsors of pension funds for National Pension System (NPS).

While seven of these are from existing pension fund managers, the three new ones are Tata Asset Management Company, DSP Investment Managers (India) Pvt Ltd and Axis Asset Management, sources close to the development said.

The seven pension fund managers who already manage NPS funds are the pension arms of SBI, UTI, LIC, ICICI, HDFC, Aditya Birla Sun Life and Kotak.

PFRDA issues RFP for selection of pension fund sponsors

It maybe recalled that PFRDA had in December 2020 come out with a new RFP for selection of sponsors of pension funds for NPS, throwing open the door for more pension fund managers with at least five-fold jump in their fees, making it lucrative.

The Pension Fund Regulatory and Development Authority (PFRDA) had taken this big initiative to revamp the pension funds management structure in India and position the industry for strong decadal growth that could take the overall assets under management of NPS to ₹30-lakh crore by 2030.

The main objective behind the RFP is to expand the number of players (only serious) in the pension industry and ensure that existing as well as new players are better remunerated in terms of fund management fees in line with the size of their operations.

This latest RFP had several firsts to its credit. This is the first time PFRDA had come out with a combined RFP — both for the government and private sector. For the government, the last RFP was in 2012 and in 2013-14 for the private sector. They had different structures and restrictions.

Slab structure

The Government was open for certain state-controlled pension fund managers and the private sector was open for all. In April 2019, the government had allowed even private pension fund managers to manage NPS funds of government schemes. Now, there is no distinction between government, PSU or private pension fund managers.

Strong show: Pension assets surge 35.65% as of November 2020

This is also the first RFP where PFRDA had specified a slab structure for investment management fee. In the earlier regime, it was a flat fee. PFRDA has now gone in for a graded slab structure (four slabs from 3 paise to 9 paise) so that the new entrants to this field will not find it difficult to build a corpus. This will help them achieve scale while meeting their early establishment expenses. From a previous regime fee level of 1 paisa for every ₹100 of pension funds managed, PFRDA has now proposed an average fee of 5 paisa per ₹100 of pension monies managed. This is a five-time increase. This effective fee of about 5 paise is the cheapest in the pension world and PFRDA pricing is the most competitive.

With increase in fee structure, it is expected that pension fund managers will make profit while having funds for building infrastructure and support team.

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