In a newspaper report spotlighting the impact of CRISIL’s downgrade of JSPL issuances on some debt funds, a spokesperson of ICICI Prudential was quoted as saying (emphasis mine): “Our exposure on the said company is very measured as compared to our total debt funds under management.” I am not sure what to make of this statement which, while factually true, omits to mention the concentration risk in some of its individual funds.
Consider, for instance, ICICI Prudential Fixed Maturity Plan - Series 77 - 1100 Days - Plan M, whose NAV fell by 3.42% on 16 Feb. According to data from Value Research, its top 5 holdings (as on Jan 31) accounted for over 70% of the portfolio. Here are the details:
| Company | Credit Rating | % Assets |
| Emami Infrastructure | AA- | 14.59 |
| 10.84% Aspire Home Finance Corp. 2018 | A+ | 14.12 |
| 9.63% Jindal Steel & Power 2016 | BBB+ | 14.06 |
| 13.07% Janalakshmi Financial Services 2018 | A | 14.00 |
| 11.35% Prestige Estates Projects 2018 | A+ | 13.86 |
It’s a pattern that appears to more or less repeat itself across a number of other FMPs. These are the top holdings of ICICI Prudential Fixed Maturity Plan - Series 76 - 1185 Days - Plan H:
| Company | Credit Rating | % Assets |
| Prism Cement 2018 | A- | 14.69 |
| Sadbhav Infrastructure Project 2018 | A+ | 14.58 |
| 9.62% JSW Steel 2017 | AA | 14.32 |
| 12.15% Ujjivan Financial Services 2017 | A | 13.50 |
| 9.55% Shriram Transport Finance 2018 | AA+ | 13.13 |
| 9.63% Jindal Steel & Power 2016 | BBB+ | 13.02 |
And these are the top holdings of ICICI Prudential Fixed Maturity Plan - Series 75 - 1246 Days - Plan U:
| Company | Credit Rating | % Assets |
| Essel Mining Industries 2018 | AA | 14.93 |
| Amri Hospitals 2018 | AA- | 14.42 |
| Sadbhav Infrastructure Project 2018 | A+ | 14.23 |
| 12.15% Ujjivan Financial Services 2017 | A | 13.84 |
| 9.63% Jindal Steel & Power 2016 | BBB+ | 12.83 |
| Asian Satellite Broadcast 2018 | Unrated | 10.20 |
Do these holdings really represent what one might call a “measured” exposure?
An investor need be scarcely concerned with what exposure a fund house takes on a single security relative to its total AUM but he/she has a reason to be concerned about such exposure relative to the AUM of the scheme that he/she has invested in. Going by these portfolios, I’d say that investors in these FMPs certainly have a reason to be concerned. Probably, very concerned.
