L&T Investment Management Limited

Transcription

1 Summary of rated instruments L&T Investment Management Limited June 14, 2018 Instrument Current Rated Amount (Rs. crore) Rating Action L&T Triple Ace Bond Fund - ; reaffirmed L&T Short Bond Fund 1 - ; reaffirmed L&T Flexi Bond Fund ; reaffirmed L&T Banking and PSU Debt Fund - ; reaffirmed L&T Cash Fund ; reaffirmed L&T Ultra Short Fund - ; reaffirmed L&T Liquid Fund ; reaffirmed Total Rating action ICRA has reaffirmed the credit risk rating of (pronounced ICRA triple A m f s) for the L&T Triple Ace Bond Fund, L&T Short Bond Fund 1, L&T Flexi Bond Fund and L&T Banking and PSU Debt Fund of L&T Investment Management Limited (the Asset Management Company (AMC)) 2. Schemes with this rating are considered to have the highest degree of safety regarding timely receipt of payments from the investments that they have made. ICRA has also reaffirmed the credit risk rating of (pronounced ICRA A one plus m f s) for the AMC s L&T Cash Fund, L&T Ultra Short Fund and L&T Liquid Fund. Schemes with this rating are considered to have a very strong degree of safety regarding the timely receipt of payments from the investments that they have made. The modifier {"+" (plus)/ "-" (minus)} reflects the comparative standing within the category. The ratings indicate ICRA s opinion on the credit quality of the portfolios held by the funds. The ratings do not indicate the AMC s willingness, or ability, to make timely payments to the fund s investors. The ratings should not be construed as an indication of expected returns, prospective performance of the mutual fund scheme, NAV or volatility in its returns. Rationale and Key Rating Drivers ICRA s mutual fund rating methodology is based on evaluating the inherent credit quality of the fund s portfolio. As a measure of the credit quality of a debt fund s assets, ICRA uses the concept of credit scores. These scores are based on ICRA s estimates of the credit risk associated with each exposure of the portfolio taking into account its maturity. To quantify the credit risk scores, ICRA uses its database of historical default rates for various rating categories and maturity buckets. The credit risk ratings incorporate ICRA s assessment of a debt fund s published investment objectives and policies, its management characteristics, and the creditworthiness of its investment portfolio. ICRA reviews relevant fund information on an ongoing basis to support its published rating opinions. If the portfolio credit score meets the benchmark of the assigned rating during the review, the rating is retained. If the benchmark credit score is breached, ICRA gives a month s time to the debt fund manager to bring the portfolio credit score within the benchmark credit score. If the debt 1 Erstwhile L&T Short Opportunities Fund, renamed accordance with SEBI s mutual fund scheme categorization, w.ef 14-May For complete rating scale and definitions, please refer to ICRA s website ( or other ICRA rating publications 1

2 fund manager is able to reduce the portfolio credit score within the benchmark credit score, the rating is retained. If the portfolio still continues to breach the benchmark credit score, the rating is revised to reflect the change in credit quality. The ratings have been reaffirmed following ICRA s analysis of the credit risk profile of the month-end portfolio position of the schemes. The credit risk scores for the schemes were comfortably within the benchmark limits for the current rating levels. Analytical approach: For arriving at the ratings, ICRA has applied its rating methodologies as indicated below. Links to applicable criteria: ICRA - Mutual Fund Credit Risk Rating Methodology About the company: L&T Investment Management Limited L&T Investment Management Limited, the asset management company of L&T Mutual Fund (L&T MF), is a wholly-owned subsidiary of L&T Finance Holdings Limited. L&T MF acquired the asset management business of DBS Cholamandalam and the Indian business of Fidelity Mutual Fund in 2010 and 2012, respectively. At the end of FY2018, the AMC s average assets under management stood at Rs. 65,829 crore. L&T Triple Ace Bond Fund Launched in March 1997, L&T Triple Ace Bond Fund is an open-ended debt mutual fund scheme with a stated objective to generate regular and stable income for the unit-holders of the Scheme. The scheme invests in invest predominantly in AA+ and above rated corporate bond instruments with an aim to generate returns matching the investment objective. The fund had a corpus of Rs. 222 crore and an average maturity of about 3.35 years as on April 30, L&T Short Bond Fund Launched in December 2011, L&T Short Bond Fund is an open-ended debt mutual fund scheme investing in instruments such that the macaulay duration of the portfolio is between 1 year to 3 years. The scheme has a stated objective to generate returns for investors with a short-term investment horizon by investing in fixed income securities of shorter term maturity. The fund had a corpus of Rs. 3,109 crore and an average maturity of about 1.51 years as on April 30, L&T Flexi Bond Fund Launched in August 2006, L&T Flexi Bond Fund is an open-ended dynamic debt mutual fund scheme investing across duration. The scheme has a stated objective to generate reasonable returns through a diversified portfolio of fixed income securities over medium to long term. The fund had a corpus of Rs. 69 crore and an average maturity of about 2 years as on April 30, L&T Banking and PSU Debt Fund Launched on September 20, 2007, L&T Banking and PSU Debt Fund is an openended debt mutual fund scheme. The investment objective of the scheme is to generate reasonable returns by primarily investing in debt and money market securities that are issued by banks, public sector undertakings, public financial institutions and municipal bonds in India. The fund had a corpus of Rs. 196 crore and an average maturity of around 10 months as on April 30,

3 L&T Cash Fund Launched in November 2006, L&T Cash Fund is an open-ended debt mutual fund scheme investing in overnight securities. The scheme has a stated objective of delivering reasonable returns with lower volatility and higher liquidity through a portfolio of debt and money market instruments with overnight maturity. The fund had a corpus of Rs. 425 crore and an average maturity of less than a month as on April 30, L&T Ultra Short Fund Launched in November 1997, L&T Ultra Short Fund is an open-ended debt mutual fund scheme investing in instruments such that the macaulay duration of the portfolio is between 3 months to 6 months. The scheme has a stated objective to generate reasonable and stable income and provide liquidity to the unit holder. The scheme invests in a well diversified and highly liquid portfolio of money market instruments, government securities and corporate debt. The fund had a corpus of Rs 2,312 crore and an average maturity of about 7 months as on April 30, L&T Liquid Fund Launched in October 2000, L&T Liquid Fund is an open-ended debt mutual fund scheme with a stated objective to generate reasonable returns while maintaining safety and providing the investor superior liquidity. The scheme invests predominantly in a portfolio of money market instruments, government securities and corporate debt. The fund had a corpus of Rs 14,671 crore and an average maturity of about a month as on April 30, Key financial indicators: Not applicable Status of non-cooperation with previous CRA: Not applicable Any other information: None 3

4 Rating history for last three years: Instrument Current Rating (FY2019) Type L&T Triple Ace Bond Long 1 Fund L&T Short Bond Long 2 Fund Long 3 L&T Flexi Bond Fund L&T Banking and PSU Long 4 Debt Fund Short 5 L&T Cash Fund L&T Ultra Short Short 6 Fund Short 7 L&T Liquid Fund Amount Rated (Rs. crore) Amount Outstanding (Rs. crore) Jun-18 Chronology of Rating History for the past 3 years FY2018 FY2017 FY2016 May-17 Oct-16 May-15 - Complexity level of the rated instrument: ICRA has classified various instruments based on their complexity as "Simple", "Complex" and "Highly Complex". The classification of instruments according to their complexity levels is available on the website 4

5 Annexure-1: Instrument Details ISIN No NA Instrument Name Date of Issuance / Sanction Coupon Rate Maturity Date NA NA NA NA NA Amount Rated (Rs. crore) Current Rating and Outlook NA 5

6 ANALYST CONTACTS Karthik Srinivasan Neha Parikh Rohan Rustagi RELATIONSHIP CONTACT L. Shivakumar MEDIA AND PUBLIC RELATIONS CONTACT Ms. Naznin Prodhani Tel: Helpline for business queries: (open Monday to Friday, from 9:30 am to 6 pm) info@icraindia.com About ICRA Limited: ICRA Limited was set up in 1991 by leading financial/investment institutions, commercial banks and financial services companies as an independent and professional investment Information and Credit Rating Agency. Today, ICRA and its subsidiaries together form the ICRA Group of Companies (Group ICRA). ICRA is a Public Limited Company, with its shares listed on the Bombay Stock Exchange and the National Stock Exchange. The international Credit Rating Agency Moody s Investors Service is ICRA s largest shareholder. For more information, visit 6

7 ICRA Limited Corporate Office Building No. 8, 2nd Floor, Tower A; DLF Cyber City, Phase II; Gurgaon Tel: Website: Registered Office 1105, Kailash Building, 11th Floor; 26 Kasturba Gandhi Marg; New Delhi Tel: Branches Mumbai + (91 22) /53/62/74/86/87 Chennai + (91 44) /9659/8080, / 3293/3294, Kolkata + (91 33) / / / , Bangalore + (91 80) /4049 Ahmedabad + (91 79) /5049/2008 Hyderabad + (91 40) /7251 Pune + (91 20) Copyright, 2018 ICRA Limited. All Rights Reserved. Contents may be used freely with due acknowledgement to ICRA. ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. ICRA ratings are subject to a process of surveillance, which may lead to revision in ratings. An ICRA rating is a symbolic indicator of ICRA s current opinion on the relative capability of the issuer concerned to timely service debts and obligations, with reference to the instrument rated. Please visit our website or contact any ICRA office for the latest information on ICRA ratings outstanding. All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable, including the rated issuer. ICRA however has not conducted any audit of the rated issuer or of the information provided by it. While reasonable care has been taken to ensure that the information herein is true, such information is provided as is without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information. Also, ICRA or any of its group companies may have provided services other than rating to the issuer rated. All information contained herein must be construed solely as statements of opinion, and ICRA shall not be liable for any losses incurred by users from any use of this publication or its contents 7