After the recent Franklin Templeton episode, investors are wary of credit risks. However, as mutual funds are more exposed to structured credit, they are still safe, Amit Tripathi, CIO, Fixed Income Investments, Nippon India MF tells ET Wealth.
With credit profile of India Inc set to sag further, do you see more pain for debt funds?
The post-Covid environment will only add to the weakness that existed even before the lockdown. There are two aspects to this weakness—availability of liquidity for corporate balance sheets and debt servicing capability of India Inc amid slow growth. In the midst of this, the Franklin Templeton episode has turned the focus on concerns around credit.
With credit profile of India Inc set to sag further, do you see more pain for debt funds?
The post-Covid environment will only add to the weakness that existed even before the lockdown. There are two aspects to this weakness—availability of liquidity for corporate balance sheets and debt servicing capability of India Inc amid slow growth. In the midst of this, the Franklin Templeton episode has turned the focus on concerns around credit.
Going forward, the environment will be even less sanguine. One will have to be careful for the next six months. Credit quality deterioration will be more pronounced in the unsecured space. Among non-financials, discretionary consumer facing businesses will face issues. These businesses will need sufficient…
