There have been 2 new developments in the debt market which has been doing rounds with more seriousness. Amtek Auto Group is staring at a ₹17500 Cr. Debt due to over leveraging and Jindal Steel & Power have got its debt papers under rated. Following these developments SEBI has summoned Mutual Fund Houses having big exposure in these Corporate Papers for evaluation. JM Mutual has gone into scrutiny, Franklin has been asked to give the data since it has exposure of more than ₹4500 Cr’s in Jindal.
Banks like Axis, Corporation Bank etc., have big exposure in the Amtek Auto lending. Any further negative development will bring shock waves into the market which is already reeling under pressure of Global consolidation.
The assets that could get affected are Fixed Maturity Plans of fund houses and to some extent all their short term schemes. If the confidence of the investors in these secure assets is shaken, the overall markets will move into a prolonged sideways consolidation.
Automobile sector which was the leader in 2014-15 market rallies has slowed down; Amtek has mentioned it and have been experiencing the same in their investments in buying out larger businesses across the globe.
With a couple of days left for the Fed Interest drama to pan out, this week is going to be a serious one at the markets. Fed decision making is planned to be done over two days, 16th and 17th September. Our markets are to be closed on 17th following Ganesh Chathurthi, which will add to more pressure.
As people pray to Lord Ganesh asking “GIVE ME MORE YA”, it has to be seen what will be more, pain or pleasure.