In August, Amtek Auto defaulted on its Rs 800 crores bond payment. Rating agencies CARE and Standard and Poor withdrew their rating of the New Delhi-based supplier of parts to automakers such as Ford Motor Co and Maruti Suzuki India. Brickwork Ratings lowered the rating to D by October.
This hit funds invested in this paper; notably JPMorgan India Treasury Fund and the JPMorgan India Short Term Income Fund. Investors naturally were frazzled. After all, the Indian investor is not used to debt funds posting losses, and certainly not related to credit quality issues.
This incident brought to light the importance of having a bottom-ups approach with regards to credit quality and not relying totally on rating agencies.
Three debt fund managers speak on credit. These views were shared during panel discussions held at the Morningstar Investment Conference.
Maneesh Dangi, Co-CIO, Birla Sunlife Mutual Fund
Navneet Munot, Executive Director and CIO, SBI Mutual Fund
Shobhit Mehrotra, Senior Fund Manager and Head of Credit, HDFC Mutual Fund
