Indian asset managers Kotak Mahindra Asset Management Co. and Nippon Life India Asset Management Ltd. have temporarily suspended fresh inflows into specific debt and retirement funds in response to a landmark Supreme Court ruling that overturned the permanent write-off of Yes Bank Ltd.’s Additional Tier 1 bonds from a 2020 government-backed rescue. The apex court’s decision revived ₹8,415 crore worth of riskier debt instruments that had previously been marked down to zero, triggering expectations of a substantial market valuation increase and potential windfall profits for investors holding the instruments. Because these funds currently carry the impacted bonds at zero value, fund managers halted subscriptions in key products—including medium-term, credit risk, and retirement wealth-creation plans—while awaiting regulatory clarity on how to properly revalue the assets and prevent valuation discrepancies for incoming unitholders. While Yes Bank shares declined following the unexpected verdict, the judgment marks a historic victory for aggrieved bondholders who are now poised to recover their principal and accumulated interest.
