INSUBCONTINENT EXCLUSIVE:
long-term debt programme of Rs 4,979 crore and long-term bank facilities and nonconvertible debentures worth Rs 12,700 crore to
default.
Three mutual fund houses including Reliance Nippon Asset Management, SBI Mutual Fund and UTI Mutual Fund have exposure to papers of
Reliance Home Finance and Reliance Commercial Finance in their portfolios worth Rs 2,405 crore, as per data from Morningstar India
While Reliance Nippon has an exposure of Rs 1,546 crore, SBI Mutual Fund holds papers worth Rs 788 crore
UTI Mutual Fund has exposure to the tune of Rs 71 crore in its portfolio.
This is the third blow to debt mutual fund investors in the last
After ILFS was downgraded to default ratings, many fund houses had to write off their investments in its securities, leading to losses for
investors in various debt schemes, which held these papers
Some fixed maturity plans (FMPs), which held Essel Group papers, had to return lesser money to investors after they matured recently.
CARE
also downgraded its ratings on some NCDs, principal protected market linked debentures, subordinated debt, NCD public issue and upper Tier 2
will in turn lead to lower NAVs of schemes holding them
below investment grade, rating agencies do not provide valuation for these bonds
Morningstar India.
Reliance Mutual Fund has exposure to these bonds in its fixed maturity plans, credit risk, equity hybrid, equity savings,
manner as certain other MFs, has exposure of Rs 535 crore and Rs 1,083 crore to longterm NCDs issued by Reliance Commercial Finance and
to market valuation impact on the above exposure, basis revised valuation provided by independent valuation agencies, with corresponding
However, as the bonds are now rated below investment grade, we will be valuing it accordingly, in line with SEBI guidelines in this
788UTI71Total2,405As on March 31, 2019; source: Morningstar India