IDBI MF drags Ballarpur Industries to Company Law Tribunal over default on commercial paper

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26 Aug, 2025 12:21

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IDBI Bank-promoted fund house, IDBI Mutual Fund has moved the National Company Law Tribunal or NCLT against Ballarpur Industries Ltd (BILT) for non-payment of maturity proceeds worth Rs 30 crore, sources aware of the development told Moneycontrol.

Ballarpur Industries has so far paid  only Rs 4 crore to IDBI Mutual Fund, and the remaining Rs 26 crore is pending. An email  sent to Ballarpur Industries remained unanswered, and they also did not respond to text messages and phone calls.

IDBI Mutual Fund was holding commercial papers of Ballarpur Industries in its 2 fixed maturity plans, short term fund and corporate debt opportunities fund.

Ballarpur Industries managed to make the payment of Rs 4 crore on the maturity date of 2 FMPs because of which IDBI Mutual Fund was able to pay the investors of the schemes on time.

However, investors of short term fund and corporate debt opportunities fund were affected as the fund house was unable to honour redemption requests of these investors.

The issue of Ballarpur Industries came to light, when 4 debt funds of Taurus Mutual Fund marked down their net asset values (NAV) by 7-12 percent each after India Ratings and Research (Ind-Ra) downgraded Ballarpur Industries Ltd (BILT) to default status.Taurus owned Rs 100 cr of Ballarpur Debt.

The long-term issuer rating of Ballarpur was downgraded to ‘IND D’ on February 22.

Apart from IDBI Mutual Fund and Taurus Mutual Fund, other 3 fund houses--DHFL Pramerica, Invesco Mutual Fund, and Reliance Mutual Fund--had significant exposure to debt papers of Ballarpur Industries.

Reliance Mutual Fund had exposure worth Rs 125 crore, Invesco owned Rs 100 crore worth of Ballarpur debt and the highest of all was DHFL Pramerica Mutual Fund that had exposure worth a whopping 275 crore.

DHFL Pramerica Mutual Fund owned Rs 179 cr of Ballarpur debt in DHFL Pramerica Low Duration Fund, Rs 50 cr in the Short Maturity Fund and about Rs 45 cr in the Credit Opportunities Fund.

According to sources, Reliance MF, Invesco MF and DHFL Parmerica MF have managed to take it off from their books by selling the debt paper.

Ballarpur Industries--part of the Avantha Group--makes writing and printing paper. The consolidated net loss of the company widened to Rs 327.5 crore for the third quarter ended December 2016, on account of low income and higher finance costs.

Ballarpur Industries had posted a net loss of Rs 59.31 crore in the same period of the previous fiscal.

Total income from operations fell by 66.23 percent to Rs 365.42 crore, from Rs 1,082.21 crore in the year-ago period.

During the quarter, the company's finance cost stood at Rs 240.78 crore as against Rs 117.61 crore reported a year ago.

The company will report its results for the financial year ended March 31, 2017 on May 23.

Ballarpur Industries debt equity is 6.5 times, while its debt to market cap is 6.6 times.

The interest coverage ratio of Ballarpur Industries stood at (-) 0.7 percent and debt to 12 year-profit after tax was 6.7 times. The gross block to debt was 1.2 times.