Friday, March 14, 2008

Cash with Indian Mutual Funds - Rs.24,000 crore !!

I had written about the cash holdings with Indian Mutual Funds a few days ago. As per the computations based on data till Jan'08, the net cash available with mutual funds (equity) amounted to around Rs.16,000 crore.

Funds mobility data for the month of February from the AMFI indicates a further addition of Rs.7,500 odd crores. This was largely on the back of NFOs (raising Rs.6,266 crore) and existing schemes adding about Rs.1266 crore (including ELSS) in Feb.

The cumulative cash available with domestic mutual funds in India, as of Feb'08, thus approximates Rs.24,000 crore.

Two important things to note here is that:

a). MFs are NOT facing redemption pressures, despite such a sharp fall since the beginning of the year.

2). And, despite sitting on such a large cash position (equivalent of around 12.5% of the total assets under management), MFs were net sellers in the secondary market (during the last two months).

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