Debt funds are being hit by a double whammy.
With credit rating downgrades for several companies piling up one after the other, exposure to troubled entities seems to be adding up for a few of these funds.
The exposure as a percentage of the overall fund portfolio is also slowly inching up as the fund corpus itself bleeds owing to high redemptions by investors.
For instance, Baroda Treasury Advantage has holdings across DHFL, Essel and Yes Bank group entities with a combined exposure of 38.79% of its portfolio.
DHFL Pramerica Short Maturity has holdings in papers of ADAG, DHFL and Yes Bank group entities aggregating to 55% of the fund portfolio.
Similarly, Aditya Birla Dynamic Bond and Aditya Birla SL Medium Term Plan have holdings in Essel and ILFS entities totalling 16.7% and 22.01% of their corpus, respectively.
While singular instances of rating downgrade in a debt fund do not impact the NAV much owing to diversified holdings, multiple downgrades have started to put pressure on fund NAVs.Debt mutual funds' combined exposure, across ILFS, Essel, Ys, ADAG DHFL SchemeNumber of troubled houses in portfolioHolding %Market value of holdings (Rs crore)Total corpus (Rs crore)DHFL Pramerica Short Maturity354.99165300Baroda Treasury Adv338.79210542Tata Corp Bond228.2152184Aditya Birla SL Medium Term222.011,7288,093IDBI Credit Risk219.351894Aditya Birla SL Dynamic Bond 216.676774,059Reliance Strategic Debt 316.259095,593DHFL Pramerica Credit Risk 312.85102796Reliance Credit Risk 412.601,1719,292UTI Bond212.1382674ADAG figures only pertain to Reliance Commercial Finance Reliance Home Finance.
Source: Ace MF; Data compiled by ETIG Database