MFs funding to NBFCs rise almost 47% to Rs 2.33 trillion in Oct 2024

Mutual fund (MF) debt exposure to NBFCs, which includes commercial papers (CPs) and corporate debt, has now remained above Rs 2 trillion for more than half a year

The money raised by non-banking financial companies (NBFCs) from mutual funds (MFs) rose by almost 47 per cent year-on-year (Y-o-Y) to Rs 2.33 trillion in October 2024. Sequentially, the funding support by MF to NBFCs rose by 0.3 per cent over September, according to CARE Ratings.

 

Mutual Fund (MF) debt exposure to NBFCs, which includes Commercial Papers (CPs) and Corporate Debt, has now remained above the Rs two trillion for more than half a year. Moreover, CPs have remained above the one trillion mark for almost a year, currently amounting to Rs 1.22 trillion.

 

The credit exposure of banks to NBFCs stood at Rs 15.4 trillion in October 2024, indicating a 6.4 per cent Y-o-Y growth. On a month-on-month (m-o-m) basis, the amount rose by 0.5 per cent. However, the proportion of NBFC exposure relative to aggregate credit decreased from 9.4 per cent in October 2023 to 8.9 per cent in October 2024.

 

In October 2024, mutual funds’ debt exposure to NBFCs remained at the same level sequentially at 15.2 per cent of banks’ advances to NBFCs, up from 11.0 per cent in October 2023, it added.

 

Following RBI’s hike in risk weights on bank loans to NBFCs in November 2023, the share of exposure by banks to NBFCs as of October 2024 has remained the same sequentially.