EXECUTIVE SUMMARY. HDFC Asset Management Co. (HDFC AMC), promoted by HDFC is in the news for all the wrong reasons, a rare situation for a blue-blooded group which is the darling of institutional investors. The only saving grace is that it is not the only AMC which has been impacted by its mutual fund schemes’ exposure to the troubled Essel founder group of investment companies (flagship: Zee Entertainment Enterprises). What should be of concern to HDFC AMC’s shareholders is not only the relatively high concentration of Essel group exposure in its Fixed Maturity Plan (FMP) schemes, but its investment policy, which permitted it to invest in these companies. This development thoroughly exposes the mutual fund’s credit appraisal and risk management systems and should be a wake-up call to its shareholders and investors in its debt schemes.