Debt mutual fund schemes of Reliance, UTI MF holding Altico Capital could see a sharp dip in NAVs

With Altico Capital defaults on interest payments worth Rs 19.9 crore to Mashreq Bank, Dubai, mutual funds holding the security, could mark down their investments in the company by up to 75 per cent today. This means a scheme having a exposure of 5 per cent to Altico Capital could see its net asset value fall by 3.75 per cent in a single day.

“Mutual funds are likely to mark down their holdings in the scheme, by 75 per cent today post rating action,” said a domestic fund manager.

On September 12, Altico Capital India Ltd, a lender to real estate companies, said in a stock exchange filing that it has defaulted on interest payments worth Rs 19.9 crore due to Mashreq Bank of Dubai.

Earlier on September 3, India Ratings and Research (Ind-Ra) had downgraded Altico Capital India Limited's Long-Term Issuer Rating to 'IND A+' from 'IND AA-.

Mutual fund schemes of Reliance Nippon Life and UTI Mutual Fund have an exposure worth Rs 537 crore to Altico Capital through 15 of their schemes.

As per data from Rupeevest, among open-ended schemes, UTI Credit Risk Fund with a 5.69 per cent holding, has a Rs 200 crore exposure to the troubled NBFCs. Reliance Ultra Short Duration Fund has a 4.61 per cent holding (Rs 150 crore exposure). Six close-ended schemes and FMPs of UTI Mutual fund and seven close-ended FMPs of Reliance Nippon Asset Management have holding to papers of Altico Capital.