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Sebi asks mutual funds to hone due diligence, playing on debt funds

Mutual funds have to work on due diligence practices before picking up corporate bonds and should not just rely only on credit ratings given the rising defaults, Sebi chairman Ajay Tyagi said today. "There are instances of defaults on debt portfolio so natur
Markets

Sebi asks mutual funds to hone due diligence, playing on debt funds

Mutual funds have to work on due diligence practices before picking up corporate bonds and should not just rely only on credit ratings given the rising defaults, Sebi chairman Ajay Tyagi said today. "There are instances of defaults on debt portfolio so naturally mutual funds need to strengthen their due diligence and evaluation mechanisms and not only depend on credit rating agencies," Tyagi told an Amfi summit here. The Sebi chief also warned MFs against playing too much on debt funds, given the poor shape of many corporates, also the bad loans in the banking system and the possibility of some of such funds finding their way into the fund houses. "Care should be taken that NPAs do not get shifted to MF portfolio by way of debt transfer," Tyagi warned. The warning from the markets watchdog comes amidst many companies including Amtek Auto, Jindal Steel & Power, Ballarpur Industries, having defaulted on their debt coupon payments in recent past and given the pathetic shape of ...

Fund raising via QIP hits eight-year high; banks lead

Fund raising via the qualified institutional placement (QIP) route hit an eight-year high, with more than a dozen companies already raising around Rs 34,000 crore in first six months of the current calendar year 2017 (H1CY17).Thus far in CY17, 14 companies ha
Markets

Fund raising via QIP hits eight-year high; banks lead

Fund raising via the qualified institutional placement (QIP) route hit an eight-year high, with more than a dozen companies already raising around Rs 34,000 crore in first six months of the current calendar year 2017 (H1CY17).Thus far in CY17, 14 companies have collectively mobilised Rs 33,907 crore from investors - the highest amount in the past eight years. Earlier during the entire CY09, as many as 53 companies had raised Rs 34,676 crore via QIP. In CY14, total 33 companies mobilised Rs 31,684 crore, according to PRIME Database."The bull run has fuelled a money raising frenzy among corporates, who are making use of the market condition to raise funds for future growth. Besides, the rally has ensured that the cost of raising funds / equity is reduced considerably. Promoters, on their part, are making full use of this opportunity," says G Chokkalingam, founder and managing director of Equinomics Research & Advisory.The total amount raised through QIPs in CY17 represents a 64-fold

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