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LIC Mutual Fund has received ₹295 crore payment as part of its investments in troubled IL&FS Securities Service. The entire IL&FS Group companies have delayed interest and redemption of its bonds, rattling the entire financial markets.
Earlier this month, LIC Mutual Fund had got the first tranche of ₹200 crore from IL&FS Securities Services which has been acquired by IndusInd Bank.
Mutual funds had invested about ₹2,800 crore in the debt securities of ailing Infrastructure Leasing & Financial Services and its group companies, which were downgraded recently on liquidity concerns.
LIC Mutual Fund has received all interest payments and maturity proceeds from IL&FS group entities, the fund house said in a statement on Friday.
It has been a tough month for the financial markets due to default of IL&FS and its group entities, followed by volatility in the bond market. Both these incidents, along with advance tax outflows, rupee depreciation, and GST-related outflows created a liquidity deficit of almost ₹1.5 lakh crore in the market, it said.
However, it added, “We now feel that interest rates are on the upward trajectory and there are expectations that the RBI would hike the repo rate by at least by 25 bps, if not 50 bps, considering the recent sharp movement of the rupee against the dollar.”
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