Expect YES Bank hit on your equity fund: Top MFs have large holdings

A couple of equity mutual fund schemes from top fund houses may take a big hit after the YES Bank stock cracked more than 30 per cent in Friday’s trade following Thursday’s takeover of the bank management by the Reserve Bank of India (RBI).

Shares of the private sector lender came under pressure in Friday’s trade after the central bank took control of the bank and clamped curbs on withdrawals and advances because of a serious deterioration in its financial position.

Data available with Ace Mutual Fund showed domestic money managers like HDFC Asset Management Company, SBI Funds Management, Kotak Mahindra Asset Management and Nippon Life India Asset Management held between 1-5 crore shares of YES Bank as of January 31.


Mutual fund holdings data for February month was not yet available.

YES Bank shares traded 34.87 per cent down at Rs 24 at around 10.30 am on Friday, while the benchmark BSE Sensex was down 1,123 points, or 2.92 per cent, at 37,347 around the same time.

Franklin Templeton Asset Management, UTI Asset Management, ICICI Prudential Asset Management and Quantum Asset Management also held between 20-92 lakh shares in their portfolios as of January 31, 2020.

A spokesperson for ICICI Prudential Mutual Fund said its debt funds as well as actively managed equity schemes have zero exposure to YES Bank. The marginal exposure reflected in the official data is on account of index funds, he said.

The Reserve Bank on India's moratorium and withdrawal cap on YES Bank is credit negative, and the lack of coordinated action highlights continued uncertainty around bank resolutions, Moody's Investors Service said on Friday.

RBI on Thursday imposed a moratorium on the capital-starved lender, capping withdrawals at Rs 50,000 per account and superseded the bank board with immediate effect.

HDFC Mutual Fund on Friday said its schemes have no outstanding exposure to debt securities issued.

Below are HDFC MF schemes equity exposure to YES Bank as on March 05:

Meanwhile, Icra today downgraded YES Bank’s debt instruments worth Rs 52,611.70 crore to ‘default’ after the cash-strapped lender was placed under a 30-day moratorium by the Reserve Bank of India. “The ratings downgrade factors in the moratorium placed on the bank by the central government, whereby the bank’s payments to its depositors and creditors is now restricted,” Icra said.

Here are the full details: