Page 17 - BF Cover February 2019

MUTUAL FUND

MUTUAL FUND

NEWS
NEWS
NEWS
NEWS
NEWS

Two mutual funds mark Mutual funds have Rs 8,650 crore exposure to DHFL &

down IL&FS SPV debt four group entities
Dewan Housing Finance (DHFL) is once again on investors' radar after the mort-
Two of the country's biggest mutual gage lender's December quarter numbers showed
funds have marked down the value acute pain from the September liquidity crisis in the
of debt is- NBFC space, leading to a 37per cent drop in quar-
sued by two terly profit.
special pur- DHFL first came on the radar after domestic mu-
pose ve- tual funds sold off their bonds and commercial pa-
hicles (SPVs) pers in distress following a debt default by IL&FS group. The company has since
of Infra- been busy raising money to pay off maturing debt. Disbursements dropped 95
structure Leasing & Financial Ser- per cent sequentially in December quarter even as the company bundled and
vices as the troubled infrastructure sold off some high-yielding loans.
investor's financial woes continue to The company's December quarter shareholding data showed ace investor
rattle financial markets. Rakesh Jhunjhunwala sold some 23 lakh shares during the quarter to bring down
his stake by 0.73 per cent to 2.46 per cent. Yet, several fund houses had expo-
Four months after parent IL&FS sure worth about Rs 8,650 crore to DHFL and its group entities like Aadhar
sparked a major crisis with its default
Housing Finance, Essential Hospitality, Avanse Financial Services and Wadhawan
prompting a rare government inter- Global Capital at the end of December.
vention, its cash-rich and profitable
SPVs are now giving a different kind
of headache to mutual funds and RBI frees Bank of India, Oriental Bank, BoM from
other debt investors.
Prompt Corrective Action framework
Aditya Birla Sun Life Mutual Fund
RBI has decided to take Bank of India (BoI) and Bank of Maharashtra (BoM)
and HDFC Mutual Fund on marked out of the Prompt Corrective Action (PCA) framework following improvements
down the value of investments in
in their capital position and asset quality in the December 2018 quarter.
debt securities of two road projects
The move will remove the constraints placed on these public sector banks
owned by a unit of IL&FS after one
(PSBs) in terms of lending and undertaking branch expansion.
of them defaulted and the prospect
of the other following suit remained The RBI has also decided to remove the restrictions placed on Oriental Bank
high. of Commerce (OBC) subject to certain conditions and close monitoring.

BANKING FINANCE | FEBRUARY | 2019 | 17