Mutual fund (MF) debt exposure to NBFCs — including commercial papers (CPs) and corporate debt — stood at ₹2.33 lakh crore in October, according to a report by CareEdge Ratings. This marks a y-o-y increase of 47.1 per cent, along with a marginal sequential rise of 0.3 per cent. The exposure has remained above the ₹2 lakh crore level for more than half a year now.
The credit exposure of banks to NBFCs stood at ₹15.4 lakh crore in October, a 6.4 per cent y-o-y and a 0.5 per cent m-o-m rise. Compared to February 2018, absolute bank lending to NBFCs has surged to around 3.9x its previous level of ₹3.9 lakh crore. However, the proportion of NBFC exposure relative to aggregate credit decreased from 9.4 per cent to 8.9 per cent in the past year.
Mutual funds’ debt exposure to NBFCs remained at 15.2 per cent of banks’ advances to NBFCs — flat sequentially but up from 11 per cent last year.
MF exposure to NBFCs as a share of debt assets under management (AUM) has reduced from nearly 20 per cent in the latter part of 2018 to around 13.5 per cent by October 2024. On the other hand, the share of banks’ advances to NBFCs as a share of aggregate advances, has nearly doubled from around 4.5 per cent in February 2018 to 8.9 per cent in October 2024.
Fund mobilisation
According to RBI, fund mobilisation through Certificate of Deposits issuance grew by 57 per cent y-o-y to ₹6.01 lakh crore during FY25 (up to November 1), significantly higher than the ₹3.91 lakh crore issued in the corresponding period of the previous year. This increase was to meet banks’ funding requirements to manage the gap between the credit offtake and deposit growth, the report by CareEdge Ratings said.
Investment in corporate debt of NBFCs rose by 68.1 per cent y-o-y and 0.9 per cent m-o-m, reaching ₹1.11 lakh crore in October. Simultaneously, the share of total corporate debt attributed to NBFCs increased to 4.9 per cent from 4.1 per cent in the past year. The outstanding investments in CPs of NBFCs have remained above the ₹1 lakh crore mark for nearly a year now, increasing by 32 per cent y-o-y to ₹1.22 lakh crore in October.
