Default fear pushes funds to ring-fence Vodafone Idea debt

Indian mutual funds are carving out their investments in troubled Vodafone Idea Ltd.’s debt into separate portfolios as they seek to limit any fallout from a possible default by the telecom carrier.

UTI Mutual Fund and Nippon Life India Asset Management have moved to ring-fence their holdings in Vodafone Idea’s debt on Monday after credit assessor Care Ratings Ltd. downgraded the carrier’s borrowings, statements from the companies show. Last month, Franklin Templeton Mutual Fund also segregated the company’s debt.