Thread by @IamMisterBond

Two major incidents in Debt Markets & learnings from that:

1. @FTIIndia saga of #Winding up 6 #DebtSchemes

2. Delay in @KotakMF #FMPs repayments to Investors & giving time to Borrowers to repay

Disclaimer: Not justifying their actions/inactions/investments etc.

Hugely negative reactions by Media/Investors/MFDs - vociferously blaming respective AMCs, filing Court cases, knocking on doors of the regulator and beyond

Did not make an effort to understand actions of the #AMCs which were done to protect #InvestorInterests

What were choices with AMCs:

1. Winding up by FT/ Delay by Kotak or,

2. Sell underlying collateral at huge discounts, pay what is recovered to #Investors & raise their hands as this is part of #CreditRisk

Or, Wind up/delay in repayments to protect Investor interests?

This only harmed their image, spoiled their reputations, loss of AUMs and huge commercial losses to the AMCs, rap on their knuckles by the Regulator thru penalties, etc.

AMC actions were purely to protect interests of the Investors, recover full amounts or to the maximum extent - at the cost of some liquidity delays.

Both AMCs were looked at with suspicious eyes with the misguided thoughts that it was to dupe investors to pocket their coffers

With kind of back lash these AMCs got for doing what was right for the benefit of Investors, in future any AMC will think 10 times before protecting Investor interests.

They will only raise their hands, pay what they can and pass on #CreditRisk & #LiquidityRisks to Investors

Only stating that they did some mistakes due to omissions & commissions (post IL&FS fiasco), but post that tried to do what was in the best interests of investors

But to state and brand them as villains, accuse them of filling their own coffers was where we have failed in collective thinking

Great outcomes in the interests of investors is evident for all to see. Some delays in liquidity but so far full recovery

1. FT has already repaid 95% of o/s amounts with amazing returns to investors as well against misguided narratives that Investors will lose 50-80% of their investments &

2. Withing six months of delay, Kotak had repaid all due amounts with interest in 2019 itself in all FMPs

These are best known brands locally & internationally. Trust them to do what will be in best interests of the Investors

In future be patient post such events,do not jump to wrong conclusions,give them time to resolve issues,cooperate during this process,they will not let us down

Finally, remember that India has a great Regulator keeping a very keen eye on Investor protection.

There may be some stray incidents like these. Keep faith in our Regulator as well all the MF houses to do what is in best interests of Investors

These situations happened with these two AMCs this time. There were other AMCs earlier in similar situations. In future it can happen with some different AMCs as well.

Please remember this Tweet thread before having a knee jerk reaction.