Within six months of the Amtek Auto episode involving JP Morgan AMC, which created a stir in India's mutual fund sector and forced the market regulator to intervene with stricter debt norms, the Rs 13 lakh-crore asset management sector is hit with yet another downgrade. The firm in focus this time is Jindal Steel & Power (JSPL).
Two big fund houses — ICICI Prudential Mutual Fund and Franklin Templeton Mutual Fund — have a Rs 2,600-crore exposure to the papers of the company from the troubled steel sector.
The debenture issuance by JSPL offered a coupon rate of 10.48 per cent.
Early this week, rating agency Crisil had downgraded JSPL’s long-term rating from BBB+ to BB+ with a cautionary note that the group's liquidity would deteriorate significantly in the near-term as the stake sale in rolling mill and the receipt of the proceeds from settlement in Bolivia might take longer.
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