MF Update: Yes Bank holdings affect mutual funds

After trying for more than six months, the management of Yes Bank failed to get the required capital infused in the bank. This finally forced the banking regulator, Reserve Bank of India (RBI) to intervene to prevent any contagion impact of falling of the market. Accordingly, on March 5, the board of the bank was superseded and a withdrawal limit of Rs 50,000 per account was imposed.

This has put serious doubt on the bank’s asset quality and its ability to meet its liabilities. Following this, the list of top ten MFs exposure to Yes Bank’s debt instruments is:

Baroda Treasury Advantage Fund has the highest exposure of around 27 per cent to Yes Bank’s debt instruments. This is followed by Nippon India Strategic Debt Fund, IDBI Credit Risk Fund, Nippon India Credit Risk Fund and Nippon India Equity Hybrid Fund with an exposure of around 21 per cent, 12 per cent, 11 per cent and eight per cent. This means that these are the funds that might get affected. Even they have not segregated these exposed assets. In those terms, UTI Asset Management Company (AMC), though had an exposure to Yes Bank, they have segregated the same for some of its funds.

Even if we look at the AMC-wise exposure then, Franklin Templeton AMC is at the top followed by Nippon India AMC, UTI AMC and Kotak AMC with the total assets exposed of Rs 19.99 crore, Rs 18.59 crore, Rs 17.98 crore and 8.38 crore, respectively.

Due to the concerns, even the stock price of Yes Bank is nosediving. In today’s session at 10.35 am, it was trading at 22.15, which is around 40 per cent lower than Thursday’s close. Even the MFs, especially the index funds and ETFs, holding Yes Bank would get affected. Apart from that, even the active funds holding Yes Bank would be affected. Following is the list of top five active funds having an exposure of Yes Bank:

As we can see that in asset terms indeed, active funds would get affected. However, looking at the per cent of exposure, it is not more than a per cent. Therefore, active equity funds will not get affected that much by a fall in Yes Bank’s share price.