As lenders allowed Subhash Chandra's Essel Group a standstill on default, it's the third company in the last four months that has triggered concerns about mutual funds' investments in commercial paper after IL&FS group and Dewan Housing Finance Ltd.
Mutual funds have an exposure of more than Rs 17,000 crore to three entities, according to data by fund houses and credit rating agencies. Though it's only 1 percent of the total assets under management of the fund houses, these investment decisions have impacted investor sentiment in the last few months.
It started after payment defaults at IL&FS Ltd. dried up capital for non-bank lenders, triggering fears of a contagion in the financial market. Allegations of financial irregularities at DHFL and Essel Group's debt worries only added to concerns about mutual fund investments.
Among the fund houses with the biggest exposure to these debt instruments are Aditya Birla Sun Life Mutual Fund, UTI Mutual Fund, DHFL Pramerica Mutual Fund, Franklin Templeton Mutual Fund, HDFC Mutual Fund and DSP Mutual Fund.
Exposure To IL&FS Group
Nearly 25 schemes had exposure to debt of IL&FS group. The total exposure stood at Rs 2,500 crore. DSP Mutual Fund has the highest exposure to IL&FS, followed by Aditya Birla Sun Life Mutual Fund and Tata Mutual Fund.
Exposure to DHFL
Top mutual funds have exposure worth Rs 8,500 crore to DHFL and its group companies. The largest exposure is of UTI Mutual Funds, followed by Reliance Mutual Fund, Axis Mutual Fund and Franklin Templeton Mutual Fund.
Essel Group Exposure
Mutual funds have the biggest exposure to the Essel group at Rs 7,570 crore—the largest being of Aditya Birla Sun Life Mutual Fund, followed by HDFC Mutual Fund, Franklin Templeton Mutual Fund.
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