Commercial Papers holdings of MFs dip due to IL&FS crisis

Chennai: Mutual fund holdings in Commercial Paper (CP) have decreased by 14% at Rs 3.72 lakh crore in June compared to the previous month.

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

The MF holding has declined by 25% from an all-time high of Rs 4.9 lakh crore recorded in August last year, shows data from PRIME Database Group.

The highest Mutual Fund holdings by value as on 30th June 2019 were in commercial papers issued by NABARD (Rs 24,989.5 cr), HDFC (Rs 19,255 cr), Reliance Jio Infocomm (Rs 14,516.6 cr), Vedanta (Rs 14,478.8 cr), Reliance Retail (Rs 14,077.9 cr), Power Finance Corp. (Rs 12,966.3 cr), NTPC (Rs 9,363.1 cr), LIC Housing Finance (Rs 8,984.7cr), Reliance Industries (Rs 8,156.4cr) and SAIL (Rs 7,911.8 cr). “On an overall basis, holding of mutual funds went up in CPs of 112 issuers in the last month, while holding of mutual funds went down in CPs of 160 issuers,” Haldea said. The MF holding in CPs stood at Rs 4.3 lakh crore in May, 2019.

And MF holdings in Corporate Bonds have also declined by 4% at Rs 5.8 lakh crores in June, as against Rs 6.04 lakh crore in the previous month, with the highest MF holding in Corporate Bonds recorded at Rs 6.6 lakh crore in September 2017. The highest Mutual Fund holdings by value as on 30th June 2019 were in corporate bonds issued by Power Finance Corp (Rs 36,462.3 cr), REC (Rs 35,475.8 cr), NABARD (Rs 30,553.3 cr), LIC Housing Finance (Rs 28,272.5 cr), HDFC (23,217.6 cr), SIDBI (Rs 13,256.8 cr), Indian Railway Finance Corp (Rs 12,369.9 cr), SBI (Rs 12,267 cr), Reliance Industries (Rs 12,020.4 cr) and HUDCO (Rs 11,213.2 cr).