Corporate Debt Market Development Fund

Registered under Chapter III C of SEBI(ALTERNATIVE INVESTMENT FUND) REGULATIONS 2012

About Corporate Debt Market Development Fund (CDMDF/FUND)

The Finance Minister of India in Union Budget 2021-22 proposed to create a permanent institutional framework in the corporate bond market with the intention to instill confidence amongst the participants in the corporate bond market during the times of stress and to generally enhance the secondary market liquidity.

After the aforesaid announcement, discussions were held between the Securities and Exchange Board of India (SEBI) and the Ministry of Finance along with other financial market regulators. As a result of the discussions, the corporate debt market development Fund (CDMDF/ Fund) under AIF Regulations in the form of a determinate trust has been formed. SBI Funds Management Limited (SBI FM) has been appointed as the sponsor and the investment manager (IM) of the Fund.

The Fund is proposed to have capital contribution in the region of appx. ₹ 3088 crs to begin with and have leverage from banks or otherwise to an extent of 10 times of this corpus/capital base. The Leverage to be availed to be backed by the guarantee from Guarantee Scheme for Corporate Debt (GSCD) (a scheme managed by National Credit Guarantee Trustee Company Ltd (NCGTC)). NCGTC is a company incorporated under the Companies Act 1956 on March 28, 2014, established by the Department of Financial Services, Ministry of Finance, as a wholly owned company of the Government of India).

FUND CONSTRUCT

Fund Construct

The Fund is registered as a determinate trust under the Indian Trust Act and would have a life of approximately 15 years with a provision to extend it by another 15 years with the direction from Government and/or SEBI.

SBI CDMDF Trustee Private Limited, is subsidiary of State Bank of India, formed for being the Trustee Company exclusively for CDMDF.

The Fund is managed by SBI Funds Management Limited (SBIFM), a joint venture between State Bank of India & AMUNDI, the largest asset manager based out of Europe. SBIFM is also the sponsor of the Fund, in addition to being the manager.

Only Asset Management Companies (AMC) and their Specified debt oriented open-ended mutual fund schemes are mandated to contribute capital to the Fund i.e., 2bps and 25 bps of their eligible Asset Under Management (AUM) respectively. Contribution by AMCs is one-time while for the mutual fund schemes incremental contribution (for the incremental AUM) is required to be made with a re-set period of every six months

The Fund is a closed ended fund, and no redemptions/exits are permitted under the life of the Fund except A3 units issued to the selling specified debt oriented open-ended mutual fund schemes.  

Investment Portfolio

Investment Portfolio

invest-portfolio-obj corner

The objective of the Fund is to support the corporate debt market during the market dislocation (stress times) with liquidity. SEBI Board would be the authority to decide whether there is a liquidity stress in the market and would communicate market dislocation to the IM accordingly.

1. Normal Times (i.e., other than market dislocation/when there is no stress in the market)

No leverage /credit facility is required and the capital of Rs. 3088 crs mentioned above would remain invested in liquid and low-risk debt instruments such as

  • Low duration Government Securities (“G-Sec”)
  • Treasury bills (“T-bills”)
  • Tri-party Repo on G-sec 
  • Guaranteed corporate bond repo with maturity not exceeding 7 (seven) days etc.

Further, the Fund may also be permitted to undertake various activities related to the corporate debt market including repo, Securities Lending and Borrowing Mechanism (“SLBM”), AAA debt securities etc., as may be permitted by SEBI from time to time, subject to suitable risk management measures.(“Normal Investments”);

2. Market Dislocation (as and when declared by SEBI)
  • Once the market dislocation is declared by the regulator, the IM would liquidate CDMDF’s existing portfolio created during the normal times. The credit facility from the banks would be used, and the overall cash available (capital from units’ holders plus credit from banks) can be deployed in the corporate bond market.
  • Only investment grade credit instruments including listed money market instruments to be bought by the Fund from the specified open- ended debt schemes of mutual funds, where there is liquidity stress in the market, but the credit quality is good. There are also prudential norms prescribed by the regulator which the Fund would follow in terms of buying of debt securities i.e., not more than 5% of the amount available (Fund Capital i.e., corpus plus maximum permissible leverage) with single issuer and not more than 7.5% with issuers from the same group.
  • The basis allocation of the purchase consideration would be based on the capital contributed by each Mutual Fund House
  • Any investment bought during the market dislocation should not have a residual life of more than 5 years and should be listed. 
  • Though the Fund is authorized to buy only investment grade credit instrument in case there is some unforeseen loss then the first loss is to be absorbed by the specified open-ended debt schemes who sold the instrument, to an extent of 10% of the purchase consideration which would be retained by the Fund (in form of their subscription to units of CDMDF) while purchasing securities. Such retention of 10% of purchase consideration would be under a common pool of capital and would be represented by a separate class of unit capital (A3 Unit class).Post that if there is further loss (if any), it must be borne by the capital contributors (A1 and A2 Unit Class i.e Rs. 3088 crs of capital contribution mentioned above).

Portfolio Disclosures

Portfolio Disclosures(As On 20-May-24 )

Weighted average Yield.

6.94 %

Weighted average Maturity

0.97 Years

Weighted average Modified Duration

0.88 Years

Weighted average Macaulay Duration.

0.92 Years
View Portfolio Disclosures
View Historical Portfolio Disclosures
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Contact Person/s

Contact Person/s

Ajit Dange

SVP & Fund Manager (CDMDF)
  • email
    ajit.dange@sbimf.comcdmdf@sbimf.com
  • call+91-22-6179 3016

Vinaya Datar 

Chief Compliance Officer 
  • email
    Vinaya.datar@sbimf.com cdmdf@sbimf.com
  • call+91-22-6179 3091

Ketan Patel 

Head Operations (AIF) 
  • email
    Ketan.patel@sbimf.com
  • call+91-22-6179 3554
map-icon
  • Trustee CompanySBI CDMDF Trustee Private Limited
  • Investment Manager SBI Funds Management Limited

9th Floor, Parinee Crescenzo, Bandra Kurla Complex, Bandra – East, Mumbai – 400051, Board number: +91-22-61793000

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Frequently Asked Questions (FAQs)

Valuation Policy

Framework for CDMDF (SEBI Circular No. 128 dated. July 27, 2023)

Investment by Mutual Fund Schemes and AMCs in CDMDF (SEBI Circular no. 129 dated. July 27, 2023)

Notification by DEA, Ministry of Finance dated 26th July 2023.pdf

  • For any queries and complaints to be registered with “Corporate Debt Market Development Fund (CDMDF)”, kindly write us on cdmdf@sbimf.com
  • If not satisfied with the responses from “CDMDF”, you can lodge your grievances with SEBI at https://scores.gov.in/ or you may also write to any of the offices of SEBI. For any queries, feedback or assistance, please contact SEBI Office on Toll-Free Helpline at 1800 22 7575 / 1800 266 7575.
  • You shall first take up your grievance by lodging a complaint directly with “CDMDF” (Refer Point - A). If the grievance is not redressed satisfactorily, then you may, in accordance with the SCORES guidelines, escalate the same through the SCORES Portal in accordance with the process laid out therein (Refer Point - B). After exhausting all available options for resolution of the grievance, if you are still not satisfied with the outcome, you can opt for online resolution of dispute through Conciliation/Arbitration on SMART ODR Portal at https://smartodr.in

Alternatively, you can opt for online resolution of dispute through the SMART ODR Portal if the grievance lodged with us was not satisfactorily resolved or at any stage of the subsequent escalations mentioned in the above paragraph (prior to or at the end of such escalation/s).

Disclaimer

Please note that the above information are only for the purpose of information only. Please refer to Fund Documents, SEBI AIF Regulations 2012, SEBI MF Regulations / circulars, Notification by DEA & other applicable regulatory guidelines etc. issued from time to time in this regard. Any inconsistencies in the above information, the Fund Documents / the Regulations and notification would prevail. These views alone are not sufficient and should not be used for the development or implementation of an investment strategy in any manner whatsoever. It should not be construed as investment advice to any party. All opinions and estimates included herein constitute our view as of this date and are subject to change without prior notice. Neither SBI Funds Management Limited / SBI CDMDF Trustee Private Limited, its directors, employees, agents nor any person connected with it, accepts any liability arising from the use of the information. The user should completely rely on their own investigations. Please refer to the private placement memorandum / contribution agreement / applicable regulations for details on the product and seek independent professional advice.