Source | The Economic Times : By Saikat Das
The Employees’ Provident Fund Organisation (EPFO), which manages the superannuation kitty for most of India’s salary-earners, is casting its net wide to squeeze some extra yield out of its corpus. After allocating a bit of its funds to stocks, the country’s biggest debt buyer would now scoop up bonds of companies below the triple A, or highest safety, rating.
The Central Board of Trustees, headed by the Labour Minister, is likely to have approved the long pending proposal to invest in lower-rated (AA+, a notch lower than triple-A rated paper) corporate bonds issued by private companies but with duel ratings, two people familiar with the matter told ET. The official notification is due in the next few weeks.
“This is the first time that EPFO will invest in lower AA+ rated private companies, rated twice,” said a market source, who is not authorised to talk to the media. Some corporate bonds with such grade include L&T Finance, Adani Transmission, Reliance CapitalBSE -1.43 %, Tata Housing, Yes BankBSE 2.26 %, IndusInd BankBSE -0.24 %.