Corporate investments rise 27% in Debt Mutual Funds
During the pandemic period, the majority of companies withdrawn debt mutual funds. In recent times, corporate investments in debt mutual funds observed a slight recovery. Subsequently, corporate firms invested billions of dollars in debt schemes.
According to the source, the Corporate investments in debt funds increased by 27% from April 2020 to February 2021. However, those investments grew up to 14% during the same period in the last year.
Additionally, the debt funds’ average corporate AUM stood at Rs. 10.16 trillion at the end of February 2021.
Further, a number of Indian companies increase funds through share sales from public and private equity investors. Through those investments, the Indian stocks observed a liquidity-fuelled rally.
However, the current financial year observed an Equity capita increased highest ever seen in the Indian market. As of the source, the rush in investments occurred at a time when the economy and India Inc. were dealing with the fallout of the pandemic and nationwide lockdown.
Franklin Templeton’s six credit risk funds failed to prevent corporate banks from investing their cash in debt funds.
According to the source, nearly 2,485 publicly traded companies reported their earnings for the third quarter ended 31st December. The results mentioned that net profit after adjusting for one-time items grew at the fastest pace in at least 25-quarters, at 72% from a year earlier, according to data compiled by Capitaline. That compares with a 35% rise in the September quarter and a contraction of 13% in the December quarter of 2019.