Mutual fund (MF) debt exposure to non-banking financial companies (NBFCs), including commercial papers (CPs) and corporate debt, remained above the Rs 2 lakh crore mark for the fifth consecutive month touching Rs 2.34 lakh crore in August 2024. This marks an increase of 32.6 per cent year-on-year (YoY) and 0.5 per cent sequentially, CareEdge Ratings said in a report.
The report added that aggregate MF exposure to NBFCs is at the January 2019 level of Rs 2.34 lakh crore. Meanwhile, CPs have consistently remained above the one lakh crore mark for nine consecutive months, standing at Rs 1.29 lakh crore.
The credit exposure of banks to NBFCs stood at Rs 15.2 lakh crore in August 2024, indicating an 11.9 per cent YoY growth. This growth is despite HDFC’s exposures being reclassified after its merger with HDFC Bank. On a month-on-month (m-o-m) basis, the amount fell by 0.4 per cent.
Meanwhile, the proportion of NBFC exposure with aggregate credit has reduced from 9.3 per cent in August 2023 to 9.0 per cent in August 2024, according to the report. In August 2024, mutual funds' debt exposure to NBFCs increased to 15.4 per cent of "banks' advances to NBFCs," up from 12.8 per cent in August 2023 and 15.2 per cent in July 2024.
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