Nippon Life India AMC Gets In-Principle SEBI Approval to Settle Yes Bank AT-1 Case

मुख्य टेकअवे

• Nippon Life India AMC paid ₹96.76 crore towards settlement of the Yes Bank AT-1 bond matter. 
• SEBI has provided in-principle approval, while the formal settlement order is still awaited. 
• The one-time charge affected September-quarter earnings, while quarterly average AUM increased 20% to ₹7.87 trillion. 

Nippon Life India Asset Management has received in-principle approval from the Securities and Exchange Board of India to settle a regulatory matter linked to investments in Yes Bank's additional tier-1 bonds. 

The asset manager paid ₹96.76 crore towards the settlement during the September quarter. A formal settlement order from the regulator is still awaited. 

The matter relates to investments made by Reliance Mutual Fund, which was subsequently renamed Nippon India Mutual Fund after Nippon Life acquired the business. 

According to the regulatory allegations reported by Reuters, Reliance Mutual Fund invested ₹2,150 crore in Yes Bank AT-1 bonds between 2016 and 2019. 

The bonds were later written down as part of Yes Bank's 2020 restructuring. 

Court Ruling Adds Separate Recovery Angle 

Earlier in October, the Supreme Court set aside Yes Bank's write-off of ₹8,400 crore of AT-1 bonds. 

Nippon Life India AMC said that any amounts ultimately recovered following the court proceedings would be passed to investors in the relevant mutual fund schemes and would not form part of the AMC's financial results. 

The ₹96.76 crore settlement payment, meanwhile, had an impact on the company's September-quarter earnings. 

Nippon Life India AMC reported net profit of ₹324 crore for the quarter, down nearly 6%. Quarterly average assets under management increased 20% to ₹7.87 trillion, while operating profit rose 25% to ₹523 crore. 

The settlement process and the litigation over the underlying AT-1 bonds are separate matters. The SEBI settlement relates to the regulatory case involving the asset manager, while the court proceedings deal with the treatment of the bonds themselves. 

For affected mutual fund investors, the next relevant developments include issuance of SEBI's formal settlement order and the eventual outcome of any recovery arising from the Yes Bank AT-1 bond litigation.