Vodafone Idea is seen as the most impacted by the judgement. The company has a total debt of close to Rs 98,000 crore as of September 2019.
The fall in NAVs of many of these schemes was more than half of their annual returns of 7-10 per cent.
“UTI AMC has decided to value the NCDs of Vodafone Idea at the lower of the two prices provided by the valuation agencies with effect from January 17, 2020. UTI AMC would review the valuations based on future developments and keep the investors informed,” said UTI AMC in a note to investors.
Mutual funds cumulatively hold Rs 3,348-crore of Vodafone Idea papers. Franklin holds paper worth Rs 2,049 crore, Aditya Birla Sun Life Rs 508 crore, Nippon India Rs 241 crore and UTI MF Rs 551 crore.
The decline in NAVs after the Supreme Court judgement adds to the list of instances in the last couple of years where mutual fund investors in debt schemes had to take a hit on account of delayed repayments, defaults or credit rating downgrades by companies.
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5 Comments on this Story
Vishnu Mangal399 days ago
It is ridiculous, Small investors cannot take any risk, so they have invested in these debt funds.
But it is very much surprised to see that all AMC’s have given burden of Vodafone Bond write-off on small investors. Invested fund value of many investors goes in negative.
Its totally wrong, they are not risk taker persons, that's why invested in debt scheme and these AMC’s are charging upfront fee for their services towards their expertise in dealing in market. This is shame on these AMC’s, they have cheated thousands of people invested in these scheme. It’s a day light robbery of investors fund. Many have invested their hard earned money for seeking just 2% more interest in these schemes. Bank FD is already giving 7% interest.
Shashank Goel407 days ago
Fund manager acts in connivance. This is second default in uti credit risk fund after altico capital in Sept 19. It raises serious questions on their risk management process. Why no review was done after altico capital? I request sebi to investigate for investor protection
Ranjan Thimpu408 days ago
Why Vodafone can not honor papers ? Its MNC should able to cope up with financial obligation. Its always common investors who have to suffer? I think SEBI needs to look into this.