Rating Rationale
June 14, 2018 | Mumbai
CRISIL reaffirms 'CRISIL AAAmfs' rating on Reliance Money Market Fund and Reliance Liquid Fund
Rating Action
Reliance Money Market Fund (Erstwhile Reliance Liquidity Fund) CRISIL AAAmfs (Reaffirmed) 
Reliance Liquid Fund (Erstwhile Reliance Liquid Fund - Treasury Plan) CRISIL AAAmfs (Reaffirmed) 
1 crore = 10 million
Detailed Rationale

Securities and Exchange Board of India (SEBI), vide circulars dated October 6, 2017, and December 4, 2017, had issued guidelines on categorisation and rationalisation of mutual fund schemes. The guidelines are aimed at making mutual fund schemes clearly distinct in terms of asset allocation and investment strategy, and to bring in uniformity in the characteristics of similar type of schemes launched by different mutual funds. The objective here is to standardize the mutual fund scheme categories and characteristics of each category.

In order to comply with the said guidelines, Reliance Nippon life asset management ltd (RNLAML), the Asset Management Company, has renamed and reconstituted their schemes as mentioned above in the table.

The details of change in fundamental attributes of each of the schemes are detailed below:

Reliance money market fund will now invest in money market instruments having residual maturity up to 1 year ranging between 0-100% of the total assets. Earlier, the schemes used to invest in repo and reverse repo ranging between 0-35% and money market instruments and/or other short term debt instruments and/or G-sec less than 1 year maturity ranging between 65-100% of the total assets.

Reliance liquid fund will now invest in money market and debt instruments with maturity upto 91 days ranging between 0-100% of the total assets. Earlier, the schemes used to invest in call money/cash/repo and reverse repo ranging between 0-50% and money market instruments ranging between 0-100% of the total assets with maturity of instruments upto 91 days.

The scheme has been reconstituted after taking due approvals from SEBI and investors. CRISIL has assessed the schemes post-reconstitution and has reaffirmed its 'CRISIL AAAmfs' rating.

The rating indicates CRISIL's opinion on the credit quality of the debt securities that the fund holds. The rating does not indicate the AMC's willingness or ability to make timely payments to the fund's investors. The rating is also not an opinion on the fund's net asset value (NAV). The NAV may vary with developments in the market.

Key Rating Drivers & Detailed Description
'CRISIL AAAmfs' indicates CRISIL's opinion on the credit quality of the portfolio of debt securities that the Fund holds; the rating does not indicate the willingness or ability of the AMC to make timely payments to the funds' investors. 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.

CRISIL's assessment of a rated fund's credit quality is based on the creditworthiness of the fund's portfolio. CRISIL has developed a credit quality matrix to assess the aggregate credit quality of a fund's underlying portfolio. The matrix is a set of credit factors and credit scores derived scientifically from the default and transition rates of CRISIL's long-term ratings. The credit factors reflect the expected default behaviour of the respective securities in the portfolio, and the expected deterioration in their credit quality. The lower the credit factor for each security, the higher would be its inherent credit quality. The credit factors are applied to the proportion of securities held in each rating category to arrive at the credit score for the portfolio. The rating on the fund is assigned on the basis of the fund's total credit score. A rated fund needs to maintain, at all times, a credit score consistent with its assigned rating.

About the AMC 
RNLAML manages RMF's funds in accordance with the provisions of the investment management agreement, trust deed, regulations, and objectives of each fund. RNLAML had average assets under management of Rs 244903.56 crore during the quarter ended March 31, 2018.

Any other information
A Bond Fund Credit Quality Rating indicates CRISIL's opinion on the credit quality of the portfolio of debt securities that the fund holds; the rating does not indicate the willingness or ability of the AMC to make timely payments to the funds' investors. The rating is also not an opinion on the fund's net asset values (NAVs); the NAVs can vary with developments in the market. 

Note on complexity levels of the rated instrument:
CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments.
Annexure - Details of Instrument(s)
ISIN Name of instrument Date of allotment Coupon rate (%) Maturity date Issue Size (Rs cr) Rating assigned with outlook
Annexure - Rating History for last 3 Years
  Current 2018 (History)  2017   2016  2015  Start of 2015
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Reliance Money Market Fund     CRISIL AAAmfs 31-08-17 CRISIL AAAmfs 14-02-17 CRISIL AAAmfs 07-01-16 CRISIL AAAmfs 16-01-15 CRISIL AAAmfs  
        14-02-18 CRISIL AAAmfs              
Reliance Liquid Fund     CRISIL AAAmfs 14-02-18 CRISIL AAAmfs 28-04-17 CRISIL AAAmfs 28-04-16 CRISIL AAAmfs 16-01-15 CRISIL AAAmfs  
All amounts are in Rs.Cr.
Links to related criteria
Rating Methodology for Credit Quality Ratings of Bond Funds

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