Rattled nerves at India Inc lead to boom in overnight funds to Rs 123 bn

Assets with overnight funds soared to Rs 123 billion last month, from Rs 39 billion in September, as companies chose safety over returns

Corporate treasury departments in India have become so concerned about credit risk they’re increasingly parking their cash in securities maturing overnight.

Assets with overnight funds soared to 123 billion rupees ($1.8 billion) last month, from 39 billion rupees in September, as companies chose safety over returns in the wake of a rare debt default, data from Morningstar Investment Adviser India Pvt. show. Strong demand has seen five firms, including Reliance Nippon Life Asset Management Ltd., lining up new offerings.

Overnight funds could gain more heft if the regulator tightens rules for money-market funds, which in September suffered the worst outflows since at