The liquidity crisis in the non-banking financial companies (NBFC) space triggered by the default of infrastructure lending major IL&FS last September is continuing to have an impact on mutual fund (MF) deployments in the sector.
The overall exposure of debt MFs to NBFCs stood at 2.2 lakh crore in February, a drop of 45,386 crore since July 2018 when the liquidity stress first emerged. The share of NBFCs in allocations by debt MFs has reduced to 15.6% in February from 19% in July last year.
