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| Capitalstars Investment Advisor |
UTI Mutual Fund on Monday said it has received payment to the tune of Rs 20.50 crore from troubled non-bank lender Altico Capital which was unpaid since September.
Certain UTI Mutual Fund schemes invested in debt instruments of Altico that were downgraded to below investment grade by credit rating agencies in September 2019. Subsequently, UTI Mutual Fund schemes marked down their respective exposures to such instruments by 75 percent.
On December 30, Altico Capital -- a realty-focused Non-Banking Finance Company (NBFC) -- distributed available cash to lenders in proportion to their respective overdue aggregate principal amount outstanding and along with applicable interest.
In connection with this, certain UTI Mutual Fund schemes received an aggregate amount of Rs 20.50 crore from Altico Capital and such schemes accounted for their respective portion of such amount, the fund house said in a statement.
UTI Credit Risk Fund had an exposure of about Rs 200 crore in debt security of Altico Capital.
Altico Capital had defaulted on its payment commitments in September, leading to system-wide concerns over another NBFC finding the going tough.
To some, the default allegedly happened because a lender did not release funds it was holding on to on behalf of the company, and also exposed coordination worries in Indian banking.
UTI Mutual Fund's sponsors are State Bank of India, Punjab National BankNSE 0.49 %, Bank of Baroda and Life Insurance Corporation of India.
Last month, UTI Mutual Fund filed draft papers with markets regulator Sebi to float an initial public offering and according to investment bankers, the issue size is expected to be around Rs 3,000 crore.
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