According to a report by CARE Ratings, Mutual funds’ debt exposure in the form of commercial paper (CP) and corporate debt (CD) to non-banking finance companies (NBFCs) rose by ________ per cent year-on-year (YoY) to Rs 1.7 trillion in March.

Solution

According to a report by CARE Ratings, Mutual funds’ debt exposure in the form of commercial paper (CP) and corporate debt (CD) to non-banking finance companies (NBFCs) rose by 14.3 per cent year-on-year (YoY) to Rs 1.7 trillion in March. The growth was on account of the issuance of CPs by NBFCs for funding investments in initial public offerings (IPOs) and shifting long-term to short-term investments as the market expected a hike in interest rates. The percentage share of funds deployed by MFs in NBFCs’ CPs stood at 4.4 per cent of debt assets under management (AUMs) in March, compared with 3.6 per cent last year. Meanwhile, investments in corporate debt of NBFCs rose by 7.4 per cent YoY to Rs 97,000 crore in March. The percentage share too increased to 5.8 per cent in March from 5.6 per cent last year.