IREDA likely to blacklist Birla Sunlife Mutual Fund

Mumbai: The state-run Indian Renewable Energy Development Agency (IREDA) may blacklist Birla Sunlife Mutual Fund from participating in primary issue of debt after the later failed to honour their bidding obligation of Rs 200 crore in the recently concluded bond issue of IREDA, a senior official from IREDA said.

IREDA had invited bids on Mar 20 to raise Rs 250 crore by selling 10-year bond at 8.25 per cent. The state-run renewable energy company had got and accepted four bids worth Rs 50 crore, each, from Birla Sunlife MF, aggregating Rs 200 crore

However, on Monday, March 25, the pay-in date of the bond issue, Birla Sunlife MF failed to meet its bidding commitment stating they had 'Erroneously bid' at the auction.

"They bid four times at Rs 500 million each and made mistakes all the time. We will make sure market knows about this unprofessional behaviour of Birla Sunlife MF," the IREDA official told TickerNews on Monday.

The official said IREDA has been forced to withdraw the said issue because of this unprofessional behaviour of Birla Sunlife MF. "We will ensure to take serious action against them for spoiling our issue."

"We have also decided to blacklist Birla Sunlife MF from participating in further issuances. The exchanges will also debar the MF for 30 days," the official added saying, "They won't be able to place their funds by direct participation in the debt market."

Market experts believe Biral SunLife MF's portfolio would not be hampered due to the blacklisting or debarment by exchanges, as the MF can always participate in the secondary market.

But IREDA is not taking the issue lightly and is considering informing all PSUs, who are active in bond market to take action against Birla SunLife MF. "We will also write to SEBI to amend regulations for avoiding this kind of situations in future. Alike to equity market's ASBA," the official said.