HDFC Asset Management Company took a 35 per cent markdown on its exposure to Simplex Infrastructures, after its non-convertible debentures (NCDs) were downgraded to ‘D’ by CARE Ratings. HDFC Credit Risk Fund had Rs 124 crore of exposure to NCDs of the company.
Last month, the fund house had taken a 15 per cent markdown when the company’s NCDs were downgraded from ‘BBB’ to ‘BB+’, which is a below-investment grade. The 35 per cent-markdown was taken as the Securities and Exchange Board of India regulations require any secured exposure to infrastructure sector to be marked down by 50 per cent, if the rating is downgraded to ‘D’ grade.
A note issued by the fund house showed that the impact on the net asset value of HDFC Credit Risk Fund was 0.3 per cent, as a result of the latest markdown.