With recent default by Mallya, I wondered if debt mutual fund also took the similar risk. The biggest problem with kind of risk is that you find it out using numbers. You need to do some judgment calls. So, I went on to look for debt mutual funds that have significant exposure to promoter loans, real estate companies and retail companies.

Non-operating, Real-estate and Retail companies

I made a list of companies with more than Rs. 300 Cr debt exposure to mutuals funds in Non-operating, real-estate or retail companies.

Promoter Funding:

promoter-funding

Highlights:

  1. Zee Group         –     2100 Cr     –     Franklin
  2. JSW Group         –       950 Cr     –     Franklin
  3. Hero Group       –       750 Cr    –      ICICI
  4. Anil Ambani       –       640 Cr    –     Franklin, DHFL
  5. JSPL Group         –       575 Cr    –     Franklin
  6. Religare Group  –       575 Cr    –     Birla

Real-estate:

real-estate

Highlights:

  1. Tata Group         –    1700 Cr     –     Franklin, Birla, ICICI, SBI
  2. DLF Group          –     1400 Cr    –     Franklin
  3. Piramal Group   –     1400 Cr    –     Franklin, Reliance, Kotak, HDFC
  4. Shapoorji            –     1000 Cr     –     Birla
  5. Oberoi Group     –      750 Cr    –      ICICI
  6. Adani Group       –      435 Cr    –      Reliance, SBI
  7. Prestige Group   –       430 Cr    –     ICICI, Kotak, Reliance
  8. Peninsula            –       430 Cr    –     Kotak, HDFC

Retail:

retail

Highlights:

  1. Future Group            –    1700 Cr     –     Franklin
  2. Aditya Birla Group   –     1400 Cr    –     Franklin, Birla, ICIC, DHFL, Axis
  3. D-mart Group            –     1400 Cr    –     ICICI

Debt AUM by these AMCs:

amc-aum

Conclusion:

Based on above data, it looks Franklin is taking a significant risk with their debt funds compare to their total asset under management (risky exposure is beyond 20% in most funds). For other AMC, their exposure is below 5% of the total AUM.

Hence, beware before buying Franklin debt mutual fund. Some of them are even rated 5 star like Franklin Low Duration Fund.