After the downgrade of debt instruments of Altico Capital India to ‘B’ i.e. ‘below investment grade’ by CARE Ratings, UTI Mutual Fund proposes to create segregated portfolio in respect of Altico Capital India in UTI Credit Risk Fund effective from September 13, 2019 subject to approval from Board of Trustees, said the company press release.
As of 12th September 2019, UTI Credit Risk Fund has an exposure of Rs. 201.82 crores in debt securities of Altico Capital India amounting to 5.85% of AUM.
Here is the impact on the investors
- Upon recovery of money from Altico Capital India in the segregated portfolio, whether partial or full, it will be distributed to the investors in proportion to their holding in the segregated portfolio
- Existing investors in the scheme, as on the day of creation of segregated portfolio, will be allotted equal number of units in the segregated portfolio as held in the main portfolio. No subscription and redemption will be allowed in the segregated portfolio of the captioned schemes
- Investors redeeming their units will get redemption proceeds based on the NAV of main portfolio and will continue to hold the units of segregated portfolio
- Investors subscribing to the scheme will be allotted units only in the main portfolio based on its NAV
- AMC will enable listing of units of segregated portfolio on the recognized stock exchange within 10 working days of creation of segregated portfolio and enable transfer of such units on receipt of transfer requests
- AMC will disclose separate NAVs of segregated and main portfolios from the date of creation of segregated portfolio
- A statement of account indicating the units held by the investors in the segregated portfolio along with the NAV of both segregated portfolio and the main portfolio as on the day of the credit event will be communicated to the investors within 5 working days of creation of the segregated portfolio
Earlier, Tata Mutual Fund had created segregated portfolio in its three schemes having exposure to DHFL papers – Tata Corporate Bond Fund, Tata Medium Term Fund and Tata Treasury Advantage Fund.
