Kotak Mahindra Asset Management Company (AMC) said the Supreme Court's ruling on Yes Bank's additional tier-1 (AT1) bonds has restored the bonds held by two of its debt schemes. Kotak Medium Term Fund and Kotak Credit Risk Fund had valued the bonds at zero following their write-off in March 2020.
The fund house had suspended subscriptions in both schemes earlier on Thursday as a precaution to protect investors. The Supreme Court delivered its judgment later in the day.
“Kotak Medium Term Fund and Kotak Credit Risk Fund hold Yes Bank AT1 bonds that were valued at zero following their write-off during the reconstitution of Yes Bank in March 2020,” the AMC said.
“Earlier today, we proactively suspended subscriptions in both funds as a prudent measure to safeguard the interests of our investors. The Honourable Supreme Court’s judgment in the Yes Bank AT1 bond matter, delivered later in the day, has restored the Bonds. We are reviewing the judgment and will determine the appropriate course of action.”
The suspension covers fresh lump-sum and switch-in transactions, as well as new systematic investment plan (SIP) and systematic transfer plan (STP) registrations from October 15. Existing SIPs and STPs registered before that date will continue.