Mutual funds’ debt exposure in the form of commercial paper (CP) and corporate debt (CD) to non-banking finance companies (NBFCs) rose by 14.3 per cent year-on-year (YoY) to Rs 1.7 trillion in March.
The growth was on account of the issuance of CPs by NBFCs for funding investments in initial public offerings (IPOs) and shifting long-term to short-term investments as the market expected a hike in interest rates, according to a report by CARE Ratings.
The percentage share of funds deployed by MFs in NBFCs’ CPs stood at 4.4 per cent of debt assets under management (AUMs) in March, compared with 3.6