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Anil Ambani Group-promoted Reliance Home Finance on Saturday extended the maturity of its Non-Convertible Debenture by paying the interest to Reliance Mutual Fund, also owned by the same group.
The maturity of the debenture was extended by four months to October 31 on mutual consent with additional cover and coupon, said the fund house in a statement on Saturday.
In all, three schemes -- Reliance Ultra Short Duration Fund, Credit Risk Fund and Strategic Debt Fund had maturities of Rs 400 crore from the debenture on June 28.
Extension of maturities by mutual consent is a recognised global practice to deal with severe dislocations in capital markets and does not constitute to a default, said the statement.
The extension of maturity has been made purely to address timing mismatches in receipt of proceeds from the ongoing monetisation of retail asset pools of the company, it added.
RHF has monetised over Rs 5,000 crore of retail assets and will continue selling to meet its debt servicing obligations, it said.
The housing finance sector is in deep trouble with almost all categories of lenders refusing to take fresh exposure to private sector companies for nine months.
MARK-DOWN IN OTHER SCHEMES
As per Sebi guidelines, Reliance Mutual Fund has already marked-down all investments in the securities issued by RHF as they were rated ‘C’ below investment grade.
With the latest development it has been marked down further as per Sebi norms. Following this the net asset value of various open-ended schemes has come down drastically.
The 17 other schemes that hold NCDs of RHF include Reliance Equity Hybrid, Reliance Hybrid Bond, Reliance Equity Savings and 13 different series of Reliance Fixed Horizon Fund. The net asset value of these funds have been marked down by 0.48 per cent to 2.15 per cent resulting in a big blow to investors.
Most of the schemes have been rated as moderate risk schemes. Interestingly, the Reliance Ultra Short Duration Fund, which suffered a marked down by 0.58 per cent, was rated ‘moderately low’ risk as per Sebi guidelines.
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