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MFs reel from Reliance Business Broadcast Holdings default

Mutual budget, Reliance Business Broadcast Holdings, Reliance ADAG Group, CARE Ratings, BTVi, UTI Ultra Short Term Fund, RNAM On 12th September, CARE Ratings downgraded Reliance Business Broadcast Network Holdings Ltd (a Reliance ADAG Group employer) to D because of a postpone in debt servicing. Reliance Business Broadcast Network Holdings Ltd holds Business Broadcast News Private Limited as a hundred% subsidiary. The latter, which operated the business TV channel BTVi, reportedly halted operations on 1st September 2019.

 

Mutual Funds have a more or less ₹654 crore publicity to Reliance Business Broadcast Network Holdings Ltd as per facts from Rupeevest. In absolute terms, the very best exposure is in UTI Ultra Short Term Fund. However, it’s far the percentage exposures which can be alarming in numerous schemes. PGIM India Ultra Short Term Fund has incredibly excessive publicity of around one hundred% of its portfolio inside the paper. PGIM India Short Maturity Fund has 64% of its portfolio in troubled debt. PGIM India Ultra Short Term Fund became down 30% on September 13th even as PGIM India Short Maturity Fund changed into down 21%. Other budgets with massive exposures as a percent of scheme assets include PGIM India Low Duration Fund (18.66% of AUM), PGIM India Credit Risk Fund (8.45% of AUM). UTI Ultra Short Term Fund (four.15% of AUM) and UTI Retirement Benefit Pension (three.06% of AUM).

PGIM India Mutual Fund (previously DHFL Pramerica Mutual Fund) launched a note saying that it had received 50% of the money owed to it. However, it had marked down 50% of the balance price of the super debt. The debt in question is inside the shape of the mortgage in opposition to shares (LAS) which is subsidized by way of the stock of Reliance Nippon Life Asset Management (RNAM). PGIM India said that the price of the stocks is 1. Seventy-five instances the balance money owed to it. The balance amount is proposed to be settled from the proceeds found out from the sale of RNAM stocks to Nippon Life, the proprietor and biggest shareholder in RNAM.

For its element, UTI Mutual Fund determined now not to take a haircut greater than 10% of the value of the stricken debt. “The recent publicity is backed via the pledge of shares of Reliance Nippon Asset Management Company Limited (RNAM), which are to be acquired through Nippon Life Insurance (NLI) (as a part of its boom, its shareholding in RNAM as much as the maximum permissible restriction of seventy five%) at the rate equal to the open provide the price. As the mechanism of fee and charge calculations w.R.T the shares pledged to UTI MF are pre-determined, UTI MF isn’t constantly exposed to any cloth charge/ market hazard and may be paid as quickly as all approvals Nippon Life Insurance are in vicinity.

At present, the securities are valued at ninety% of the face cost. Hence we experience that the present-day markdown to 90% of Face Value on those exquisite NCDs is truthful, notwithstanding the negative rating moves- given the knowledge of payments within the brief term,” a notice launched by way of the fund stated. A variety of FMPs of UTI and PGIM India also are uncovered to the affected paper, as is the L&T Credit Risk Fund and an FMP of L&T Mutual Fund. Reliance Group groups have sued HT Media Ltd, Mint’s writer, and nine others in the Bombay excessive courtroom over a 2 October 2014 front-page story they disputed. HT Media is contesting the case.

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