Market regulator Securities and Exchange Board of India (SEBI) on Monday relaxed the investment limit for housing finance companies in debt mutual funds.
“ ... in light of the important role played by the housing finance companies (HFCs) in the housing sector, it has been decided that an additional exposure not exceeding 10 per cent of net assets of the scheme shall be allowed only to HFCs as part of financial services sector for prudential limits in debt oriented schemes,” SEBI said in a circular on Monday.
The total investment in HFCs shall not exceed 30 per cent of the net assets of the scheme.
SEBI said the relaxation would be subject to certain conditions such as that the securities issued by HFCs were rated ‘AA’ or above. Also, the HFCs should have been registered with the National Housing Bank (NHB).