MF houses hold Rs 3,494 crore in Yes Bank’s papers further downgraded

As much as 11 mutual fund houses hold Rs 3,494 crore in Yes Bank papers which got downgraded again, as per the data from MFI Explorer. The Yes Bank papers have been downgraded by ICRA twice since May.

ICRA downgraded Basel III Additional Tier I Bond from A (negative) to BBB+ (negative) and Basel II Lower Tier II Bond from AA- (negative) to A+ (negative). Among the 11 asset management companies, Reliance Mutual Fund has the highest exposure of Rs 2,216 crore in the troubled Yes Bank papers.

Some of the schemes that had exposure to the downgraded papers were: Reliance Credit Risk Fund with Rs 578 crore exposure (7.2% of the scheme’s total AUM), Reliance Equity Hybrid Fund has Rs 707 crore (6.5% of its AUM) And Reliance Strategic Debt Fund with an exposure of Rs 507 crore (12% of the total AUM). Other AMCs with a higher exposure to the papers are Franklin Templeton and UTI.

ICRA further stated, “The bank’s ability to resolve these advances in a timely manner will remain a key driver of its asset quality, profitability and capital position. YBL’s ability to reduce its GNPAs plus BB and below rated exposures, improve the CET-I capital cushion and diversify the advances and liabilities will result in a change in the outlook to Stable from Negative.”