Possible redemption pressure on mutual funds and a scenario where 1,500 smaller NBFCs might face cancellation of licences due to inadequate capital were among the major concerns as the IL&FS crisis began to roil financial markets. These were among the factors highlighted by the corporate affairs ministry as it moved the National Company Law Tribunal (NCLT) seeking change in management of the crisis-hit IL&FS.
Citing a confidential note, dated September 30, from the Department of Economic Affairs, the ministry in its plea said there was a deep concern about possible collapse of the group and its impact on the economy. As per the note, there could be redemption pressure on asset management companies having Rs 2,800 crore worth exposure to IL&FS bonds from “corporate clients who have invested in this Rs 16 trillion debt MF industry”, as per the petition filed by the ministry.
