Indian debt funds swell to record size as they gorge on risk

Singapore

FLOWS into credit mutual funds are surging in India, providing a welcome fillip to lower-rated borrowers while exposing investors to higher risks at a time of rising bad debts.

Assets under management at credit opportunities funds, which invest mostly in bonds with domestic ratings below Triple A, rose 65 per cent to 1.09 trillion rupees (S$23.2 billion) in the year to the end of April, according to data from Crisil, a Mumbai-based credit rating company. They increased further to a record 1.14 trillion rupees in May.