If you had invested in Taurus Asset Management Co. Ltd’s (AMC) debt mutual fund schemes, you’d have incurred big losses. On 22 February, net asset values of four of its debt schemes fell 7-12% in just one day
Why? The credit rating of Ballarpur Industries—in which its debt schemes had invested—was downgraded that day by India Ratings & Research, a credit rating agency. The result was a dramatic fall.
This is not the first instance of credit risk adversely affecting debt funds. In August 2015, two schemes of JP Morgan AMC had tripped on the back of a downgrade in Amtek Auto Ltd’s credit rating.
