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Aditya Birla Sun Life AMC says Crisil downgrading IL&FS Jharkhand project to impact NAV by 0.6%

Updated : January 22, 2019 10:40 AM IST

In a fresh setback for debt-ridden IL&FS, rating agency Crisil has downgraded the non-convertible debentures of a road project in Jharkhand.

Crisil has warned that this and other projects are likely to stop interest rate payments, contrary to the company's previous stance.

The downgrade is from AA to BB on the fear that the company will default on its interest payments.

Discussing the impact of the downgrade, A Balasubramanian, CEO, Aditya Birla Sun Life AMC, said, “Since it has become a BB from AA, the Rs 100 value is currently valued somewhere close to Rs 70-80 –- so 20 percent of the value gets reduced. However, from an overall NAV point of view you do reduce the value of the portfolio of that particular instrument and the impact will be about 0.5 to 0.6 percent."

He said the SPV exposure (all SPVs and not just Jharkhand Project) of all MFs together would be in Rs 1,300 crore aggregate and that of the banks would be around Rs 30,000 crore.
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