IL&FS impact: Mutual funds' exposure to group NBFCs under Sebi scanner

In some cases, exposure is as high as 12% of the fund's corpus; a few investments are also in AA rated papers that are relatively less liquid

The Securities and Exchange Board of India (Sebi) is looking into the exposure taken by certain fund houses to debt papers of their own group’s non-banking financial companies (NBFCs), said people privy to the development. 

In some cases, the exposure of a debt scheme to its group’s NBFCs is as high as 12 per cent of the scheme's total corpus. 

Further, some of these investments are in papers that are rated AA; known to be relatively less liquid.

While Sebi guidelines are not clear on the exposure limits to multiple group companies operating in the same sector, they restrict exposure