The National Pension System’s (NPS’) debt assets in AAA-rated papers has increased by 1.83 percentage point to 37.87 per cent, in the one-year period ended September 30, 2019. Over a three-year period, AAA-rated assets have surged 4.8 percentage points.
Conversely, assets in AA- and below-rated papers have reduced 87 basis points (bps) in the past year and shrunk by 3.5 percentage points in the past three years.
According to experts, the increase in AAA-rated papers signifies risk aversion in the aftermath of the IL&FS crisis. “We are concerned about the ratings and the quality of papers that we invest in, and are willing to sacrifice returns to ensure that principal is protected,” said a senior NPS official. Total NPS debt assets stood at Rs 14,246 crore as on September 30, 2019.
AA- and below-rated papers. As a percentage of overall debt assets, investments in AAA-rated and sovereign papers have surged 10.3 percentage points in the past year to 38 per cent, while those in AA- and below-rated papers have reduced 9.6 percentage points to 62 per cent.