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Essel Infraprojects NCD default - No impact on you

The short answer is, you don’t need to worry. Scripbox did not recommend any of the funds which had exposure to these securities. In fact, preventing such exposure is one of our algorithm’s key objectives

Recently Essel Infraprojects Ltd (EIL) defaulted on its debt schemes Essel Infra Series I & 2. These were Non-Convertible Debentures (NCDs) issued by the borrower.  As an investor in debt funds (Short Term Money or Emergency Funds), you must be wondering if this affects your investments.

The short answer is, you don’t need to worry. Scripbox did not recommend any of the funds which had exposure to these securities. In fact, preventing such exposure is one of our algorithm’s key objectives

Are you sure my Scripbox investments are safe?

Absolutely! This is because:

  1. Our algorithm recommends funds which belong to a category with low credit risk and low-interest rate risk. 
  2. We then do a deeper analysis of trends in portfolio risk for all funds and only recommend funds above a threshold credit risk score. 
  3. Finally, we ensure that the recommended funds are also large enough to minimise liquidity risk. 

If you are invested only in Scripbox recommended funds, stay invested. There is no need to take any action or get worried.

What if I have debt funds other than what Scripbox has recommended?

If you are invested in other funds, in most cases there is not likely to be a reason to worry. If you want to see our take on them, click here.

 

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