The NAV of JF India Bond Fund moved up from Rs 10.98 on September 18 to Rs 11.09 on September 21, which translates into a gain of 11 paise. On the other hand, the NAVs of the dividend and growth plans of JM Liquid rose by 8 paise and 16 paise, respectively. Although Kothari Pioneer also holds Reliance Petroleum debentures, the holdings are too small to make an impact on the NAV. RPL NCDs have a facevalue of Rs 40.

The price of Reliance Petroleum debenture climbed by more than 16 per cent from Rs 48.15 to Rs 55.95 in the same period. The debenture was quoted in the debt market almost after a month since the TOCDs were being converted intoequity shares.

The price movement from Rs 48.15 to Rs 51.95 on Friday was due to adjustment on account of interest accrual. The spurt in price came on Monday when the instrument gained from Rs 51.95 to Rs 56.05, before closing at Rs 55.95 on a volume of 69,200. "This is attributed to the sudden buying interest at the counter since the instrument is a good investment opportunity,'' said a secondary debt market dealer. On Tuesday, the volume went higher to 74,500 although the price dropped marginally to Rs 55.65.

If investments are made at the current price of Rs 56, an investor will get Rs 80 in three installments till 2001, or a gain of Rs 24 or a yield of over 14 per cent per annum. If the first two installments (Rs 20 in 1999 and Rs 30 in 2000) are reinvested at 12 per cent for two and one year, respectively, the additional gains work out to Rs 8.40 or a total return of Rs 88.40 (including the final installment of Rs 30 in 2001 on an investment of Rs 56). The yield here is higher at 19.28 per cent peryear.

The investments of JF India Bond Fund in Reliance Petroleum debenture accounts for almost 10 per cent of its total corpus of Rs 12 crore. In the case of JM Liquid (growth), the TOCD is the second largest holding with an investment of Rs 4.74 crore from a corpus of Rs 22.9 crore. The dividend plan holds debentures worth Rs 2.02 crore and is the second largest holding in the portfolio. ``We had fair-valued the debenture at around Rs 48 based on the last traded price, while the listed price has moved up to Rs 56 in two trading sessions. Hence, the capital appreciation of Rs 8 has aided the rise in NAV,'' said an official of a Mumbai-based mutual fund.

The price gain in Reliance Petro debentures has provided some succour to income funds, which have been besieged by low interest rates and hence, near absence of high-yielding investment opportunities.