The percentage share of funds deployed by mutual funds in commercial papers (CPs) of NBFCs in September 2020 fell to 3.2 per cent of debt AUMs. This figure stood at 9.5 per cent in September 2019, according to report by CARE Ratings.
Investments in CPs of NBFCs remained flat month-on-month in September, at Rs 50,000 crore, or nearly half that invested the previous year. Investment by debt funds in corporate debt also remained flat in September at Rs 80,000 crore.
The proportion of CPs and corporate debt deployed together in NBFCs as a percentage of total debt funds witnessed a declining trend — to 8.8 per cent in September this year from 13.8 per cent a year ago.
The proportionate share of debt AUM in the overall MF pie has improved to 49.9 per cent in September compared with 45.5 per cent in the previous year.
It was 47.7 per cent in March 2020.
In absolute terms, banks’ outstanding to NBFCs grew 46.3 per cent to Rs 8 trillion in September this year from Rs 5.5 trillion in September 2018. This data, however, does not include liquidity made available to NBFCs by banks via the securitisation route.
The overall composition of NBFCs in bank credit increased from 6.9 per cent in September 2018 to 8.7 per cent in September 2020. However, growth in bank credit to NBFCs has registered a downward trend due to the base effect and risk aversion in banking system due to the Covid-19 pandemic.
Total monthly funds raised by NBFCs from the primary market stood at Rs 20,000 crore in September compared with Rs 80,000 crore in March 2019, as banks became the major source of their financing needs following the NBFC crisis.
“The liquidity covers of NBFCs will be largely dependent on collections and the ability to raise resources during these challenging times. However, amidst this tough time banks have been lending more to them increasing their overall exposure to NBFCs,” the CARE report observed.
The weighted average yield of corporate bond issuances increased in September by 7 basis points to 7.81 per cent compared with 7.74 per cent in the previous month and 64 bps higher than that in April 2020 (7.17 per cent).
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First Published: Thu, November 05 2020. 18:30 IST