DHFL assigned default rating; MFs with high exposure see 30-50% drop in NAV

Rating agencies on Wednesday categorised the Dewan Housing Finance Corporation (DHFL) instruments as ‘default’ a day after the company delayed its repayment obligations on non-convertible debentures (NCDs), potentially burning a deep hole in the portfolios of many mutual fund (MF) schemes. More than 160 MF schemes hold the firm’s debt papers.

CRISIL and Icra assigned ‘D’ rating to DHFL’s commercial papers, anticipating a default, while CARE Ratings marked D, or default, the housing finance firm’s all long-term facilities, including public NCDs of Rs 29,000 crore and fixed deposits of Rs 8,940 crore. Brickwork Ratings downgraded debt valued at over Rs