New Delhi: UTI Mutual Fund Friday said it has written off its entire exposure to the securities of crisis-hit DHFL, which has defaulted on repayments.
The latest developments at Dewan Housing Finance Ltd (DHFL) has added to mounting concerns over the health of Non-Banking Financial Companies (NBFC).
On June 4, DHFL failed to make interest and principal payments that were due. Rating agencies -- Crisil, Icra and Care -- downgraded their ratings on the company's debt papers citing inadequate liquidity, among other factors.
"In light of the above development UTI MF anticipates that there would be enhanced pressure and legal action on DHFL from all creditors, including exercise of early redemption clause and legal options by various lenders.
"This is expected to further delay the recovery efforts of the company in disposal of its assets in an orderly manner," UTI MF said in a release.
Considering the high level of uncertainty as to recovery timelines and value, the fund house said it has "increased the markdown to DHFL debt securities from 75 per cent to 100 per cent in the schemes which has an exposure to
DHFL".