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These two fund houses alone have 56% exposure to DHFL debt

Mumbai: As the Dewan Housing Finance Ltd (DHFL) saga deepens, an insight into the funds holding the housing finance companys debt reveals that 56 per cent of a total of 5,236.53 crore holdings of such papers in schemes — were held by two fund houses- UTI Mutual Fund and Reliance Mutual Fund.

UTI MF and Reliance MF have exposure of Rs 1,736.68 crore and Rs 1,182.02 crore, respectively in their schemes to DHFL debt securities, according to data from Value Research. UTI MFs exposure to DHFL debt securities through their schemes is the highest in the industry, while Reliance MF followed next. Of the mutual funds total exposure to DHFL debt papers, UTI MFs schemes have an exposure of 33.16 per cent, while Reliance MFs schemes have an exposure of 22.57 per cent.

Of the total mutual fund exposure to DHFL debt, Rs 4,323.14 crore are in debt schemes, Rs 890.49 crore are in hybrid schemes and Rs 22.90 crore are in equity schemes.

UTI Mutual Fund said on Friday it has increased the markdown to DHFL debt securities to 100 per cent from 75 per cent in the schemes which has an exposure to the housing finance company, considering the high level of uncertainty as to recovery timelines and value.

The fund house added that if there is any recovery in future on these securities, the provision will be written back to the schemes on actual receipt basis.

“…UTI MF anticipates that there would be enhanced pressure and legal action on DHFL from all creditors, including exercise of early redemption clause and legal options by various lenders,” the fund house said in a press release.

“This is expected to further delay the recovery efforts of the company in disposal of its assets in an orderly manner. Furthermore, there is no secondary market for such securities in the current scenario,” it added.

UTI MF has an exposure of Rs 1,235.34 crore in its debt schemes to DHFL debt securities, according to data from Value Research. Its exposure to DHFL debt securities through debt schemes is the highest in the industry. Of the mutual fund debt schemes total exposure to DHFL debt papers, UTI MFs debt schemes have an exposure of 28.6 per cent.

Subsequently, on June 5, CRISIL, ICRA and CARE downgraded its rating on the Read More – Source
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