EPFO may invest in pvt corporate bonds

Looking to maximise yields, the Employees’ Provident Fund Organisation (EPFO) is likely to start investing again in corporate bonds issued by private sector companies, after a gap of over two years.

As per the current investment pattern, the EPFO can invest up to 20 per cent of its annual incremental deposits – around Rs 36,000 crore at present – in corporate bonds. But the investments have in recent years been restricted to bonds of public sector companies.

Options like when to invest in private-sector bonds and when and how to exit from such investments were discussed at the retirement fund body’s Finance Investment and Audit Committee (FIAC) meeting.

“No concrete decision has been taken today. We have been discussing the issue since last couple of meetings and today, we extended that discussion and deliberated from various angles of risk versus gain and on aspects of such investments,” said K E Raghunathan, a FIAC member and also a member of the Central Board of Trustees (CBT), the highest decision-making body of the EPFO and headed by the Union Labour Minister.