A majority of the debt fund schemes have single industry exposure in India which is a cause for concern for multidimensional investments. Single company or segment exposure of funds can be affected by redemption pressures. It is said by the rating agency, Crisil in its recent release.  

However, the company is satisfied with the portfolio credit quality of most Indian mutual fund (MF) schemes. Crisil analyzed about 860 schemes which cover 96 per cent of AUM (assets under management) of debt mutual funds. 58 debt schemes that have AUMs of Rs 1,000 crore and above, are exposed to single company while 249 schemes have significant exposure to at least one company.  

About 25 percent AUM are under a single company or industry and this trend is expected to increase in the coming times. The highest rating categories which are rated AAA and P1+ constitutes 82 per cent of the portfolios while next 6 percent analyzed schemes come under AA category. Manufacturing companies in India tries to raise funds abroad as Indian finance institutions follow complex procedure to issue credit.

The managing director & chief executive officer of Crisil, Roopa Kudva said, "Most debt funds have not compromised on credit quality in search of returns. Investors, therefore, have little reason to fear defaults eroding the value of their investments. Nevertheless, lack of adequate portfolio diversification remains an issue."