Debt mutual funds have moved away from corporate debt paper, commercial paper and bank certificates of deposit, even as the net assets of MFs grew to a record high of Rs 26.33 lakh crore in October 2019, according to a CARE Ratings study.

Overall exposure of MFs to NBFCs stood at Rs.1.86 lakh crore in October 2019, a drop of Rs 0.79 lakh crore since July 2018, when the NBFC crisis began. While the amount has reduced, the percentage share also declined from 19 per cent in July 2018 to 12.8 per cent in October 2019, it said.

According to CARE Ratings, Investments in commercial papers (CPs) of NBFCs have also seen a consistent decline every month. After the liquidity crisis triggered in the NBFC space, MFs withdrew 43 per cent of their investments from this category. The percentage share of funds deployed by MFs in CPs of NBFCs in October 2019 fell to 6.2 per cent of debt AUMs (lowest since July 2018) and the amount held declined to Rs 0.9 lakh crore.

Investments in corporate debt paper of NBFCs fell to Rs 0.96 lakh crore in October 2019 and the percentage share also declined to 6.6 per cent (lowest since July 2018) compared with 7.7 per cent in July 2018.

However, according to its analysis, the highest share (47 per cent) of debt AUMs are in short-term instruments with maturity of less than 90 days. This is followed by a share of 33 per cent in long duration instruments with maturity of 1 year and above, 11 per cent in 90-182 days and 9 per cent in 182 days -1 year, CARE Ratings further said.

Still, the largest proportion of funds of debt AUMs were invested in corporate debt papers worth Rs 4 lakh crore. This segment includes floating rate bonds, non-convertible debentures, etc. Compared with the previous month, assets in this category improved marginally by Rs 3,100 crore; however, in percentage terms, it declined to 27.4 per cent of debt AUMs, it said.

The second highest category in which debt AUMs invested their money was CPs with Rs 3.45 lakh crore. When compared with September 2019, this segment witnessed a growth of Rs 2,700 crore, but percentage share dropped to 23.6 per cent of debt AUMs. The corresponding figures for September and March-end were 25.1 per cent and 27.2 per cent respectively.

TBills, others attract funds

The amount invested in 'others' category rose to Rs.2.91 lakh crore in October 2019 and more than tripled since March 2019, which was at Rs 1.07 lakh crore. Others category that includes treasury bills, money market investments, CBLO, securitised debt, asset backed securities, mortgage backed securities, equity linked debentures/notes, bank FD, etc.

The percentage share of debt AUMs also rose to 19.9 per cent in October 2019 from 8.2 per cent in March 2019.

In the equity space, banks, finance, software, consumer non-durables and petroleum products were the top 5 sectors and they cumulatively accounted for 57 per cent of equity AUMs equivalent to Rs 6.7 lakh crore, it further said.

Related Topics