UTI Mutual Fund receives Rs. 12 crores payment from Altico Capital
UTI, formerly known as Unit Trust of India. It was divided into two parts as Specified Undertaking of Unit Trust of India and UTI Mutual Fund. Moreover, MF is the largest one in India. Because it has around 10 million investor accounts.
According to the source, Altico Capital India has paid a default amount of Rs. 12.30 crores to UTI MF. On 8th October 2020, the MF has received an unfinished payment of Rs. 12.30 crores from the real estate company. Moreover, the separated portfolio of UTI Credit Risk Fund and certain UTI’s Fixed Term Income Funds have exposure to the Altico Capital.
In September 2019, Credit rating agencies had given below investment grade to the Altico Capital debt instruments. Moreover, the maximum of UTI MF schemes had invested in these downgraded debt instruments.
Now, the MF has found that it has about 75% of exposure in debt instruments of Altico. However, the recovery funds will allocate to the investors in aspect to investor’s unit holdings said by UTI MF.
The officials of the MF said that the distribution of recovery funds move will show the responsibility of fund houses regarding the investors. Moreover, the MF may continue their efforts in the best interest of investors of their schemes, they added.
According to the source, in Altico debt security funds, the UTI Credit Risk fund had around Rs. 200 crores exposure. Moreover, the real estate company had defaulted on its payment in September 2020.
Anyhow, SBI, PNB, BOB, and LIC have sponsored the UTI Mutual Fund.