Essel Group's high-yield papers attract MFs as inflows push up demand

Fund houses have exposure of Rs 8,002 crore to such securities in the company

Essel Group firms offered upward of 12 per cent yield on securities that mutual funds (MF) invested in, according to filings with the Registrar of Companies.
 
Industry experts say that the recent inflows into credit opportunity funds helped create a pool of capital, which pushed up demand for such high-yield securities.
 
This has ultimately resulted in Rs 8,002 crore worth of exposure for the MF industry as of December — all under a cloud as liquidity constraints have hit the group.
 
A crash in Essel (or Zee) group shares prompted chairman Subhash Chandra to write an open