CREDIT BRIEF

October 2019

Monthly Credit Update

Fixed Income: Investment Process

Research

Fund Management

Risk Management

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• Credit: Exhaustive top down process combined with "bottom up" issuer selection

Rates: Access to best ofInternal/External & Proprietary

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Monthly Asset Allocation MatrixBenchmark & Peer Group AnalysisDaily Performance AttributionPortfolio Laddering

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Limit monitoring/ complianceMonthly Review of Risk AreasGlobal Supervision of Risk Processes

Highlights of the Credit Research Process

Board approved Internal Credit Risk Assessment Policy

“Credit Tracker” list of approved Credits: LT & ST: Bottom Up Approach

Inclusion and sustainability of a credit in the record/list is determined by the established credit process, which includes two broad areas :

• Approval for new credits (through credit note)• Review and monitoring of existing credits

“Early in- Early Exit” Identify new promising credits early on, take shorter exposures

Access to in house Equity Team expertise on sector/stock coverage where we take exposure

IIFL HOME FINANCE LIMITED (‘IIFHL’)

Rating: Crisil AA (stable) and ICRA AA (stable) and CARE AA( stable)Rating change in last month: No changeSector: Financial ServicesAbout: IIHFL, a subsidiary of India Infoline Finance Ltd. (IIFL), is National Housing Bank (NHB) registered Housing

Finance Company (HFC). IIFL has a diversified loan book and offers products like home loans, gold loans, commercial vehicle loans, MFI loans, MSME loans, LAP and construction finance. IIHFL caters to a vast segment of retail and corporate customers through its loan offering - this includes home loans, construction finance and loans against property, with the key focus area being housing loans to individuals against the security of residential collaterals. The company has built its portfolio only in the past few years and asset under management (AUM) of the company stood at app. 10kcr as on March 31, 2018. As of June 30, 2019, the company had an AUM of Rs 18,988 crore (Rs 18,158 crore as on March 31, 2019). The company had a networth of Rs 1,665 crore as on June 30, 2019 (Rs 1,597 crore as of March 31, 2019). It reported a profit after tax (PAT) of Rs 70 crore on a total income (net of interest expense) of Rs 178 crore for the quarter ended June 30, 2019 (Rs 296 crore and Rs 743 crore, respectively, in fiscal 2019)

IIFL Home Finance Limited (‘IIFHL’)

Coastal Gujrat Power Ltd (‘CGPL’)

Ess Kay Fincorp

Suryoday Small Finance Bank

Dewan Housing Finance Corp Ltd (‘DHFL’).

Hindalco Industries Ltd

Steel Authority Of India (‘sail’)

Indiabulls Housing Finance Ltd (‘IBHFL’).

Jamnagar Utilities And Power Pvt Ltd (JUPPL)

Chambal Fertilisers ltd

Essel Mining And Industries Ltd

Hero Cycles ltd

The Tata power Company ltd

Ultratech Cement ltd

Reliance Industries ltd

Housing Development Finance Corporation ltd

LIC housing finance ltd

ESS KAY FINCORP

Rating: India Ratings A+(SO) (Stable)Rating change in last month: No changeSector: Financial ServicesAbout: EssKay Fincorp (EKFL) is an asset financing non-deposit-taking non-banking finance company registered

with the Reserve Bank of India. The company was incorporated in 1994 and is engaged in the financing of both new and used vehicles and refinancing of pre-owned vehicles. It also provides loans to SMEs. Portfolio comprised commercial vehicle (54%), tractor (18%), Car (14%), MSME (10%) and two-wheeler (3%) as on March 31, 2019. Mr. Rajendra K Setia is the founder and managing director of the company. Profit after tax (PAT) was Rs 52.2 crore on total income of Rs 365 crore in fiscal 2019 against a PAT of Rs 22 crore on total income of Rs 227.3 crore in the previous fiscal. Profitability improved in fiscal 2019 owing to improvement in net interest income and reduction in operating expenses.The exposure has an unconditional, irrevocable partial credit enhancement by Northern Arc Capital ltd.(rated A+ by ICRA)

SURYODAY SMALL FINANCE BANK

Rating: ICRA A (stable) Rating change in last month: No changeSector: Financial ServicesAbout: Suryoday Small Finance Bank (SSFB), which started as Suryoday Micro Finance Limited, was set up in

October 2008 as a non-banking finance company (NBFC) for providing loans to women in urban and semi-urban areas under the Grameen Bank Joint Lending Model. SSFB received a licence from the Reserve Bank of India in FY2016 to commence operations as a small finance bank. Subsequently, it commenced operations as a small finance bank on January 23, 2017. The residual maturity of the NCD is now only two months. The bank has earned profit of Rs. 45.2 crore in the quarter ended Jun 2020 compared to Rs. 17.1Cr for the quarter ended Jun 2019

COASTAL GUJARAT POWER LTD (‘CGPL’)

Rating: AA (SO ) by India Ratings and CARERating change in last month: No changeSector: PowerAbout: CGPL had implemented a 4,150-MW Ultra Mega Power Project (UMPP) in Mundra in Gujarat. The

operations started in 2013. • CGPL has entered into Power Purchase Agreement (PPA) with DISCOMs in Maharashtra (760 MW), Gujarat (1805 MW), Rajasthan (380 MW), Punjab (475 MW) and Haryana (380 MW) for 3,800 MW power supply. CGPL is a wholly owned subsidiary of Tata Power, which has a strong market position as integrated power player. Tata Power is rated AA- by CRISIL. Exposure on CGPL is guaranteed by unconditional and irrevocable guarantee of Tata Power.

HINDALCO INDUSTRIES LTD

Rating: CRISIL AA (POSITIVE), CARE AA+ StableRating change in last month: No changeSector: MetalsAbout: Hindalco, the flagship company of the Aditya Birla group, commenced operations in 1962 with an

aluminium unit at Renukoot, Uttar Pradesh. It has become the largest integrated aluminium manufacturer in India, with capacity to produce 1,300 kilo tonne per annum (ktpa) of aluminium and 2,900 ktpa of alumina. The company also has a custom smelter in the copper business. The company made a consolidated PAT at Rs. 5495cr for FY19 compared to Rs. 4518cr in FY18 and the consolidated Net Debt to EBITDA was at 2.48 times as at 31st Mar 2019 compared to 2.82 times as on 31st Mar 2018

STEEL AUTHORITY OF INDIA (‘SAIL’)

Rating: CARE AA- (STABLE), India Ratings AA- (Stable)Rating change in last month: No changeSector: MetalsAbout: SAIL is a PSU with GOI stake of 75%. SAIL is an integrated iron and steelmaker with five integrated steel

plants: Bhilai Steel Plant, Durgapur Steel Plant, Rourkela Steel Plant, Bokaro Steel Plant and IISCO Steel Plant. In addition, it has three special steel plants: Alloy Steel Plant, Salem Steel Plant and Visvesvaraya Iron & Steel Plant.SAIL is one of the largest steelmakers in India, with a total crude steel and saleable steel capacity of 19.1 million tonnes per annum and 17.9 million tonnes per annum as on 30 June 2018, respectively. The company made profit of Rs. 2178cr for the year ended March 2019.Net debt to EBITDA at FY19 end was at 4.6x and management targets to achieve 2.5x. Our exposure is short term with residual maturity of less than three months.

DEWAN HOUSING FINANCE CORP LTD (‘DHFL’).

Rating: CARE D Rating change in last month: No changeSector: About:

Financial ServicesDHFL is a large housing finance company with a track record of more than 30 years. The NCDs were rated AAA by CARE at the time of our investment. The NCD’s held are secured, with security in the form of first ranking pari-passu charge on present and future receivables of the Company. The Company delayed some payment in June 2019 which has resulted in external rating downgrade to D. Due to this, independent scrip level valuation agencies marked down the secured exposures of DHFL by 75%. Currently the company has stopped paying any dues as they are in a ‘standstill mode’ awaiting signing of Inter Creditor Agreement (ICA) with the lenders. Further, the Debenture Trustee, Catalyst Trusteeship Limited, had sent a written communication asking for consent of NCD holders for acceding to the Inter Creditor Agreement (ICA) in terms of Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019. The deadline for the same was 4th Sept 2019. Pursuant to the framework for resolution of stressed assets as provided by SEBI for Inter Creditor Agreements (ICA) consent to the Debenture Trustee for the ICA was not provided. We have initiated legal proceedings to recover the monies due to Principal Mutual Fund. Legal notices have been served on DHFL as part of the process. Please also refer the following link on our website for updates on DHFL.

INDIABULLS HOUSING FINANCE LTD (‘IBHFL’).

Rating: CRISIL AA+ (Watch with developing implications), ICRA AA+ (Watch with developing implications), CARE AA+ (Watch developing)

Rating Change in last month: Downgraded from AAA by one notch Sector: Financial ServicesAbout: IBHFL continues to operate as a mortgage finance company registered with the National Housing Bank

focused on asset classes such as mortgages and commercial credit. The rating was revised downwards from AAA to AA+ with developing implications. The revision factors in the continued challenging operating environment for non-banking financiers {non-banking financial companies (NBFCs) including housing finance companies (HFCs)} with issues in funding access, especially for those with a wholesale lending book. Although IBHFL has been raising resources since September 2018 on an ongoing basis, the ease of raising resources and the cost of these resources have been impacted and improvements on this front have not materialized as expected. The reduction in recent resource raising can nevertheless be partly attributed to management's conscious decision to limit incremental borrowings, especially term borrowings, as they await regulatory approvals on the impending merger with The Lakshmi Vilas Bank Limited (LVB). The company raised around Rs 12,500 crore between April 1, 2019 and August 31, 2019 as compared to around Rs 17,000 crore raised in the quarter ended March 31, 2019. IBHFL has applied for regulatory approvals for the proposed merger of IBHFL alongwith its wholly owned subsidiary, Indiabulls Commercial Credit Limited into and with LVB. The company has received the approval from the Competition Commission of India (CCI) for this. It is possible that the credit profile of the merged entity as a bank could be relatively weaker, at least in the short term given the potential transition challenges, especially in establishing its liabilities franchise to compete effectively with existing large private sector banks. Further, while IBHFL today has a strong market position in the HFC space and is among the larger HFCs, on conversion to a bank it will be a relatively mid-sized bank. Given the evolving situation on the bank transition and challenges on the funding access front for non-banks, the ratings are on 'Watch with developing implications'.For fiscal 2019, IBHFL had a profit after tax (PAT) of Rs 4,091 crore on a total income of Rs 17,027 crore, compared with a PAT of Rs 3,895 crore and total income of Rs 14,959 crore in the previous fiscal. IBHFL is awaiting regulatory approvals for their application for merging with a bank (Lakshmi Vilas bank) which is a key monitorable going forward. We have exposure to secured bonds maturing in March 2020 and continue to monitor the situation closely

JAMNAGAR UTILITIES AND POWER PVT Ltd (JUPPL)

Rating: CRISIL AAA (stable) , CARE AAA (stable)Rating Change in last month: No changeSector: EnergyAbout: JUPPL operates coal- and gas-based power plants at Jamnagar (both in the domestic tariff area and SEZ),

Hazira, and Dahej, having combined capacity of about 2,300 MW of power and 10,000 tph of steam for catering to RIL's manufacturing facilities. In fiscal 2019, JUPPL had a net profit of Rs 133 crore on revenue of Rs 4,564 crore. JUPPL is a subsidiary of RIHPL which is a holding company owned by the promoters of RIL. Its 100% economic ownership (including direct and indirect) of JUPPL is in addition to the economic interest it holds in RIL's shares, either directly or indirectly (75.4 crore shares of RIL (worth about Rs 97,000 crore as on June 26, 2019).

CHAMBAL FERTILISERS LTD

Rating: CRISIL AA (stable)/A1+ , ICRA A1+Rating Change in last month: Downgraded from AAA by one notch Sector: Fertilisers About: Incorporated in 1985 in Kota (Rajasthan), Chambal has the largest installed urea capacity of 3.07 mn ton

(1.34 mn ton of urea unit at Gadepan-III recently commissioned in January 2019) in the private sector in India. Company is also into trading of complex fertilisers and pesticides. Chambal, a part of the KK Birla Group, is the largest private player in the Indian urea sector by production capacity, with an 8.5% share in the total domestic urea production in fiscal 2018. The company's urea plants are located near the head of the Hazira-Bijapur-Jagdishpur gas pipeline, thereby ensuring gas availability. Since, urea expansion project at Gadepan III is now operating at a healthy capacity, it is expected to replace the imports currently taking place in the northern region and thus, its market position is expected to improve further to 13-14% of total domestic urea production. EBITDA margin and interest coverage ratio, were 12.1% and 4.9 times respectively, as on March 31, 2019; against 10.9% and 5.3 times (after netting off-project related interest cost which was capitalised during the year) respectively, in the corresponding period of the previous fiscal. Chambal fertilisers & chemicals had a turnover of Rs.10,177 Crore (standalone) and net profit of 585 crores as on FY19 as compared to turnover of Rs. 7557.16 crore and net profit of Rs.495 crs on a year on year basis.

ESSEL MINING AND INDUSTRIES LTD

Rating: CRISIL AA- (stable)/A1+ , CARE A1+, ICRA A1+Rating Change in last month: No changeSector: MetalsAbout: Essel Mining and Industries Ltd (EMIL), closely held by the Aditya Birla group, is an established player in

the iron ore mining business, with a track record of over 50 years. The company is also one of the largest manufacturers of noble ferro-alloys in the country, producing ferro-molybdenum and ferro-vanadium at its unit in Gujarat and catering to the domestic special and alloy steel industries. EMIL also operates a 75-MW wind-power generation unit in Maharashtra. Additionally, the company has commissioned a solar power generation project of 20-MW under the Rajasthan State Solar Policy, and another 35-MW solar power generation project under the Andhra Pradesh State Solar Policy. Furthermore, the company has investments in several Aditya Birla group companies through a subsidiary, IGH Holdings Pvt Ltd (IGH). As on July 17, 2019, the market value of IGH’s listed investments stood at Rs. 13,387-crore. Given the sizeable quantum of its investments, EMIL remains a strategically important company to the Aditya Birla Group, which provides support to the rating. In FY2019, EMIL received an equity infusion of Rs. 1446.7 crore from holding company as well typifying support from the Aditya Birla Group. In FY2019, the company reported a standalone net profit of Rs. 895.5 crore (provisional) on an operating income of Rs. 3472.5 crore (provisional), compared to a net loss of Rs. 1726.1 crore on an operating income of Rs. 932.8 crore in the previous year.

HERO CYCLES LTD

Rating: CRISIL AA (stable)/A1+Rating Change in last month: No changeSector: Consumer goodsAbout: Hero Cycles, incorporated in 1956, is the largest bicycle manufacturer in the world. The company has a

manufacturing capacity of 6.5 million bicycles per year, with units in Ludhiana, Punjab; Bihta, Bihar; and Ghaziabad, Uttar Pradesh. It also manufactures automotive rims and components. Hero Cycles is managed by Mr Pankaj Munjal and his family. In fiscal 2016, the group completed three acquisitions: Firefox, Avocet, and BSH. Firefox is a leading player in the premium bicycles segment in India and currently sells over 100 different models. Avocet is one of the top three distributors of bicycles, e-bikes, bicycle parts, and accessories with a presence across Europe. BSH is a bicycle manufacturer based in Sri Lanka, with a state-of-the-art manufacturing plant that will be used to supplement the Hero Cycles group's sales in southern India and Europe. Hero Cycles entered the real estate business through MHPL, and acquired an under-construction hotel property in Gurugram in fiscal 2012. Hero Cycles repaid the debt contracted for the acquisition through liquidation of investments. However, the plan to build a hotel has been scrapped. MHPL has now entered into a JV with the Godrej Group by selling stake in this company for which they have received more than Rs. 400cr. They propose to construct a commercial park on the property. Hero cycles earned revenues of app. Rs. 215cr in FY19 compared to Rs. 1816cr in FY 18. PAT for the fiscal 2019 was 21cr vs 23cr in the previous year

THE TATA POWER COMPANY LTD

Rating: CRISIL AA- (Positive)/A1+ ,ICRA AA-(stable)/A1+,CARE AA(stable), India Ratings AA(stable)Rating Change in last month: No changeSector: EnergyAbout: Tata Power Company Ltd (‘TPCL’) is India's largest integrated private power utility, with installed

generation capacity of 10,957 MW (as on March 31, 2019). The company is present across the entire power business spectrum, from generation (thermal, hydro, solar, and wind) to transmission and distribution. TPCL is part of the TATA group, given Tata Sons Limited, which holds a 33% stake in TPCL. Tata Sons has demonstrated its ability and willingness to support TPCL by infusing capital in the past. TPCL is the fifth-largest investment in the books of Tata Sons after Tata Steel Limited, Tata Teleservices Limited, Tata Motors Limited and Tata Capital Limited. During fiscal 2019, Tata Power, on a consolidated basis, had a net profit of Rs 2,437 crore with operating income of Rs 32,196 crore, against a net profit of Rs 2,609 crore with operating income of Rs 29,149 crore in fiscal 2018.

ULTRATECH CEMENT LTD

Rating: CRISIL AAA (stable)/A1+ , India Ratings ltd AAA(stable),A1+Rating Change in last month: No changeSector: CEMENT & CEMENT PRODUCTSAbout: Ultratech Cement ltd (‘UCL’) is India’s largest manufacturer of grey cement, ready mix concrete and white

cement in India. It has 12 integrated plants, one clinker plant, 20 grinding units, seven bulk terminals, and two white cement and putty plants. Its operations span across India, the UAE, Bahrain, Bangladesh and Sri Lanka. UCL has a market share of 24% in India with 113.35 million tonne per annum (mtpa) capacity. Operating efficiency is superior, driven by strong consumption norms, efficient logistics (because of pan-India presence), and captive power capability. As on Sep 30, 2019, Grasim (the flagship company of the Aditya Birla group) held 60.2% equity stake in UltraTech, the other promoter group held 1.49%, and financial institutions and the public held the rest. During fiscal 2019, UCL, on a consolidated basis, had a net profit of Rs 2,432 crore with operating income of Rs 37379 crore, against a net profit of Rs 2,224 crore with operating income of Rs 31,439 crore in fiscal 2018.

RELIANCE INDUSTRIES LTD

Rating: CRISIL AAA (stable)/A1+ , ICRA AAA (stable)/A1+, India Ratings AAA (stable)/A1+, CARE AAA (stable)/A1+

Rating Change in last month: No changeSector: EnergyAbout: Reliance Industries Limited (RIL) is one of India's largest private sector companies (maket cap > 8lakh

crores as on 30th Sep 2019), with diverse interests, including petrochemicals, oil refining, and upstream oil and gas E and P.. In the recent past, RIL has diversified into newer businesses which includes organized retail and digital services. RIL operates one of the most complex refineries globally which improves its flexibility in terms of crude sourcing resulting in relatively high Gross Refining Margins (GRMs). RIL’s strength in the petrochemicals business has also grown following large-scale capacity expansions, including the refinery off-gas cracker, in the previous fiscal and healthy ramp up of operations. The company’s digital services venture, where it has made sizeable investments, has been gaining subscribers at a healthy pace since inception and has achieved a subscriber base of 331.3 million as on June 30, 2019. On August 12, 2019, Reliance Industries Limited (RIL) announced that it has signed a non-binding Letter of Intent (LoI) with Saudi Aramco1 for the sale of 20% stake in the former’s Oil to Chemicals (O2C) division to Saudi Aramco. RIL’s O2C division includes its refining and petrochemicals business along with RIL’s 51% stake in its recently announced petroleum marketing JV with British Petroleum Plc (BP). As a part of the deal, Saudi Aramco would supply 500,000 barrels per day (equivalent to ~25 million metric tonnes per annum) of crude oil to RIL’s refinery in Jamnagar on a long-term basis. The deal values RIL’s O2C division at an Enterprise Value of US$ 75 billion which translates to an investment of US$ 15 billion from Saudi Aramco. The transaction is subject to due diligence, regulatory and other approvals. The investment proceeds from Saudi Aramco along with another US$ 1 billion from BP for the latter’s 49% stake in RIL’s fuel retail business would help RIL achieve significant deleveraging. Moreover, the company announced the sale of its telecom tower business in July 2019 to Brookfields Asset Management Company, that was already transferred to an investment infrastructure trust (InvIT) as of March 31, 2019, for Rs. 25,215 crore. RIL transferred its fiber assets to another InVIT and plans to sell those assets to a strategic investor by March 2020.

HOUSING DEVELOPMENT FINANCE CORPORATION LTD

Rating: CRISIL AAA (stable)/A1+ , ICRA AAA (stable)/A1+, CARE AAA (stable)/A1+Rating Change in last month: No changeSector: Financial ServicesAbout: Housing Development Finance Corporation Limited (HDFC), India’s premier housing finance entity, is in

existence for over 40 years. With a presence in banking, insurance and asset management, the HDFC Group is an important part of the Indian financial services sector. HDFC’s has a strong franchise and has demonstrated ability to grow in the competitive mortgage finance market, its focus on prime salaried customers within the home loan segment and its good asset quality indicators over credit cycles. HDFC has a strong capitalization (capital adequacy ratio of 19.1% with Tier-I of 17.5% as on March 31, 2019), moderate gearing (4.87 times as on March 31, 2019) and good profitability indicators (return on equity of ~13.51% during FY2019). During FY2019, HDFC reported a total income of Rs. 43,378 crore and had an asset base of Rs. 4,58,776 crore compared to a total income of Rs. 40,707 crore and an asset base of Rs. 3,98,910 crore in FY2018. HDFC reported Profit After Tax (PAT) of Rs. 9,632 crore during the year ended March 31, 2019 compared to Rs. 10,959 crore during the year ended March 31, 2018

LIC HOUSING FINANCE LTD

Rating: CRISIL AAA (stable)/A1+ , ICRA A1+, CARE AAA (stable)Rating Change in last month: No change Sector: Financial ServicesAbout: LIC is the single-largest shareholder in LIC Housing with a stake of 40.31% as on Jun 30, 2019. It is India's

second-largest housing finance company, with 9 regional offices, 23 back offices, and 273 marketing units in India, and 2 overseas representative offices (1 each in Dubai and Kuwait), as on March 31, 2019. LIC Housing benefits from LIC's strong brand equity, access to its agency network for origination of loans, and funding support. LIC Housing has comfortable capitalization with a large capital base of Rs 16259 crore as on March 31st 2019. It also had comfortable capital coverage for net non-performing assets (NPAs) of 7.9 times as on Mar 31, 2019. However, gearing, at 10.5 times as on Mar 31, 2019 (10.2 times as on March 31, 2018), was higher than that of peers. It has adequate asset quality with a gross NPA ratio of 1.53% as on March 31, 2019 (0.78% as on March 31, 2018). For fiscal 2019, profit after tax (PAT) was Rs 2431 crore on total income (net of interest expenses) of Rs 4505 crore, against PAT of Rs 2002.50 crore on total income (net of interest expenses) of Rs 3815 crore for fiscal 2018.

Axis Bank LtdBank Of BarodaBank Of IndiaBharat Petroleum Corporation Ltd.Chambal Fertilisers & Chemicals Ltd.Coastal Gujarata Power LtdDewan Housing Finance Corp Ltd.Ess Kay Fincorp Ltd.Essel Mining and Industries Ltd.Export Import Bank Of India LtdHdfc Bank Ltd.Hero cycles Ltd.Hindalco Industries Ltd.Hindustan Petroleum Corporation Ltd.Housing Development Finance Corp.Icici Bank LtdIndia Infoline Housing Finance LimitedIndiabulls Housing Finance Ltd.Indian BankIndian Oil Corporation Ltd.Indian Railway Finance CorporationJamnagar Utilities And Power Pvt LimitedKotak Mahindra Bank.Lic Housing Finance Ltd.NabardNational Housing BankNational Thermal Power CorporationPower Finance Corporation LtdPower Grid Corporation Of India LtdReliance Industries LtdRural Electrification Cor LtdSidbiSteel Authority Of India Suryoday Small Finance Bank LimitedTata Power Company Ltd.Ultratech Cement Ltd

Principal Credit Risk

Fund

Principal Dynamic

Bond Fund

Principal Low Duration

Fund

Principal Short Term Debt Fund

Principal Ultra

Short Term Fund

Principal Cash

Management Fund

Issuer

Issuer wise Holding as on September 30, 2019

DISCLAIMER

Disclaimer:

The details given above are the statistical summary of the companies obtained from their website/ from the companies directly/ other research reports. The disclosure on credit quality of debt instruments/ issuers is based on the information provided by rating agencies/respective companies. Some of the schemes of the Principal Mutual Fund has exposure to securities issued by these companies. However, the Fund Manager at their discretion may or may not invest in the Debt instruments issued by above companies.

The information contained in this document is for general purposes only. The document is given in summary form and does not purport to be complete. The document does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. The information/ data herein alone are not sufficient and should not be used for the development or implementation of an investment strategy. The statements contained herein are based on our current views and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. The investment strategy stated above may change from time to time without any notice and shall be in accordance with the strategy as mentioned in the Scheme Information Document of the scheme. Investors are advised to consult their Investment advisors for determining their risk appetite and Tax Advisor before taking any investment decision.Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Principal Credit Risk Fund (An open ended debt scheme predominately investing in AA and below rated corporate bonds (excluding AA+ rated corporate bonds))This Product Is Suitable For Investors Who Are

~Seeking -• Income over a Medium to long term investment

horizon. • Investment in AA and below Rated Corporate Debt

& other Debt and Money Market Instruments.

Riskometer

Investors understand that their principal will be at moderate risk

LOW HIGH

Moderate ModeratelyHighModerately

Low

HighLo

w

~ Investors should consult their financial advisors if in doubt about whether the product is suitable for them.

Principal Ultra Short Term Fund (An open ended ultra-short term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 3 months and 6 months)This Product Is Suitable For Investors Who Are

~Seeking -• Income over a short term investment horizon. • Investment in Debt & Money Market instruments.

Riskometer

Investors understand that their principal will be at moderately low risk

LOW HIGH

Moderate ModeratelyHighModerately

Low

HighLo

w

~ Investors should consult their financial advisors if in doubt about whether the product is suitable for them.

Principal Cash Management Fund (An Open-ended Liquid Scheme)

This Product Is Suitable For Investors Who Are ~Seeking -

• Income over a short term investment horizon.• Investment in debt & Money Market Instruments,

with maturity not exceeding 91 days.

Riskometer

Investors understand that their principal will be at low risk

LOW HIGH

Moderate ModeratelyHighModerately

Low

HighLo

w

~ Investors should consult their financial advisors if in doubt about whether the product is suitable for them.

Principal Low Duration Fund (An open ended low duration debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 6 months and 12 months)This Product Is Suitable For Investors Who Are

~Seeking -• Income over a short term investment horizon.• Investment in Debt & Money Market Instruments.

Riskometer

Investors understand that their principal will be at moderately low risk

LOW HIGH

Moderate ModeratelyHighModerately

Low

HighLo

w

~ Investors should consult their financial advisors if in doubt about whether the product is suitable for them.

Principal Short Term Debt Fund (An open ended short term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 1 year and 3 years)

This Product Is Suitable For Investors Who Are ~Seeking -

• Income over a medium term investment horizon.• Investment in Debt & Money Market Instruments.

~ Investors should consult their financial advisors if in doubt about whether the product is suitable for them.

Principal Dynamic Bond Fund (An open ended dynamic debt scheme investing across duration)

This Product Is Suitable For Investors Who Are ~Seeking -

• Income over a long term investment horizon.

• Investment in Debt & Money Market Instruments.

~ Investors should consult their financial advisors if in doubt about whether the product is suitable for them.

Riskometer

Investors understand that their principal will be at moderate risk

LOW HIGH

Moderate ModeratelyHighModerately

Low

HighLo

w

Riskometer

Investors understand that their principal will be at moderate risk

LOW HIGH

Moderate ModeratelyHighModerately

Low

HighLo

w