Vodafone Idea’s (VIL) risk of insolvency due to spectrum dues it owes the government have spilled over to more mutual fund (MF) schemes, with exposed schemes seeing 4 per cent-10 per cent dip in net asset values (NAVs) on back of valuations provided by the rating agencies.
The MF industry’s overall debt exposure to VIL stood at Rs 3,389 crore as of December 31, 2019, spread across 45 schemes, showed data from Value Research.
UTI Credit Risk Fund, which has 17 per cent of scheme assets exposed to debt papers of VIL, saw 10.42 per cent dip in its NAV on Friday. UTI Bond Fund (8.32 per cent exposure) saw 4.15 per cent mark-to-market (MTM) impact on its NAV.
“Given the above uncertainties and to protect the interest of the unitholders, UTI AMC has decided to value the non-convertible debentures (NCDs) of Vodafone Idea at the lower of the two prices provided by the valuation agencies with effect from January 17, 2020,” said the company in a note.
The noted said that UTI AMC would review the valuations based on future developments and keep the investors informed.