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IL&FS crisis impact: Mutual fund holdings in CPs slump 25%

Highest ever holding of MF in corporate bonds was in September 2017 at Rs 6.61 lakh crore.

ETMarkets.com|
Updated: Jul 19, 2019, 04.56 PM IST
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Pranav Haldea, Managing Director of PRIME Database Group said, “Mutual funds have significantly reduced their exposure to CPs, after the IL&FS crisis last year.”
Mutual fund holdings in commercial paper have declined 25 per cent since August 2018. The exposure in commercial paper stood at Rs 3.72 lakh crore as of June 30, 2019 against Rs 4.92 lakh crore on August 31 last year.

The figure declined 13.69 per cent on month-on-month basis, according to primemfdatabase.com.

Pranav Haldea, Managing Director of PRIME Database Group said, “Mutual funds have significantly reduced their exposure to CPs, after the IL&FS crisis last year.”

The highest mutual fund holdings by value as on June 30 were in commercial papers issued by National Bank for Agriculture & Rural Development (Rs 24,989.50 crore), Housing Development Finance Corp. (Rs 19,255.00 crore), Reliance Jio Infocomm (Rs 14,516.60 crore), Vedanta (Rs 14,478.80 crore), Reliance Retail (Rs 14,077.90 crore), Power Finance Corp. (Rs 12,966.30 crore), NTPC (Rs 9,363.08 crore), LIC Housing Finance (Rs 8,984.74 crore), Reliance Industries (Rs 8,156.35 crore) and Steel Authority of India (Rs 7,911.82 crore).

According to Haldea, on an overall basis, in the last month, holding of mutual funds went up in CPs of 112 issuers. On the other hand, holding of mutual funds went down in CPs of 160 issuers.

In addition to this, holding of mutual funds in corporate bonds in value terms stood at Rs 5.80 lakh crores on June 30, down by 4.13 per cent from Rs 6.04 lakh crore as on May 31.

The highest ever holding of MF in corporate bonds was in September 2017 at Rs 6.61 lakh crore.
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