Mounting concerns over asset-liability mismatches at non-banking finance companies (NBFC) may lead mutual funds to prune their exposure, or switch portfolios in favour of higher-rated paper, potentially widening the spread between companies rated differently.
The spread between A and AAA paper, which has already expanded, could stretch to around 200 basis points. At Rs 11 lakh crore, domestic funds account for nearly 9% of total credit. The size of domestic mutual fund debt asset under ..
