Mutual funds’ exposure to Yes Bank paper at Rs. 2,783 crore

Nippon India, Kotak Mahindra among those impacted

The sudden moratorium on Yes Bank has put in peril many fund houses that have exposure towards the troubled lender by way of debt instruments like bonds or non convertible debentures.

According to Value Research, a mutual fund tracking entity, fund houses had a cumulative exposure of about Rs. 2,783 crore towards Yes Bank as on January 31. While Yes Bank paper constitutes a small portion in most of the schemes, there are a few in which its share is in excess of 10%.

Fund houses such as Nippon India Mutual Fund, Baroda Mutual Fund, Franklin Templeton Mutual Fund, Kotak Mahindra Mutual Fund, UTI Mutual Fund, Aditya Birla Sun Life Mutual Fund, L&T Mutual Fund IDBI Mutual Fund and Sundaram Mutual Fund, among others, have such exposure as on January 31.

The schemes that have a significant share of Yes Bank paper include Baroda Treasury Advantage Fund – Regular Plan, with nearly 27% assets belonging to Yes Bank, and Nippon India Strategic Debt Fund with a 20% share. IDBI Credit Risk Fund – Regular Plan also has a little over 12% stake in Yes Bank papers. Nippon India MF has already marked down its Yes Bank investments to zero while limiting fresh inflows in such schemes to Rs. 2 lakh per day per scheme per investor.

“We are segregating debt securities of Yes Bank following the rating falling below investment grade to D, as per SEBI regulations,” a spokesperson for Nippon India MF said.

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