Birla Sun Life Mutual Fund schemes see uptick post IL&FS SPV upgrade

Care Ratings upgraded debt papers of the firm to 'C'

Four schemes of Birla Sun Life Mutual Fund (MF) saw gains in their net asset values (NAVs) after CARE Ratings decided to upgrade IL&FS special purpose vehicle (SPV) Jharkhand Road Projects Implementation Company (JRPIL). 

The biggest jump in NAV was reported in Birla Medium Term Plan, which saw an uptick of 3.98 per cent on Wednesday. It was followed by Birla Dynamic Bond Fund (0.9 per cent gain), Birla Credit Risk Fund (0.6 per cent), and Birla Short Term Plan (0.4 per cent).  

CARE Ratings on Tuesday had decided to upgrade debentures of JRPIL from ‘D (default grade)’ to ‘C’. With this, all the major three rating agencies — CRISIL, India Ratings, and CARE — have rated the paper at ‘C’.

 

 

According to the external valuation agency’s matrix, the paper will now be valued at 65 per cent, instead of the earlier 50 per cent. Based on the ability of a particular firm to repay debt and interest, the National Company Law Appellate Tribunal (NCLAT) had classified the total debt of IL&FS and its group companies into three loan categories: Green, amber, and red.

Previously, keeping in view the financial position and ability of JRPIL to service debt, it was classified under the amber category. However, later the NCLAT re-classified it to green, allowing the firm to meet its debt obligations. 

CARE Ratings in its note said the rating of the main sponsor IL&FS Transportation Networks  continued to be ‘D’ on account of delays and defaults.