Giving out details of the exposure with regard to loan against shares (LAS), the DSP Mutual Fund said it had an exposure of only Rs 200 crore in the segment. DSP said that it was among the lowest in rank among MFs when it came to LAS to promoters of listed companies and hence least affected if case of any crises.

Off late, MFs with high exposure to LAS to promoters of listed companies are in focus as some of the promoters who had availed loan by placing their equity holding as collateral have not been able to fulfill their margin requirements. SEBI is looking to come out with rules regarding LAS by MFs.

It is estimated that in total MFs had extended in excess of ₹25,000 crore as LAS to a few corporates. Aditya Birla Sun Life MF and Franklin Templeton are among other top funds having exposure via LAS.

Such deals, wherein a few large MFs had indulged in non-banking finance company like financing, came to light just days ago. These funds are now stuck as the promoters have told MFs that they may immediately not be able to fulfil margin calls as the value of their shares, kept as collateral, has declined sharply. Loan to Zee group promoters falls under this category.

MFs have now asked SEBI to let them give promoters more time to fulfill their obligation. The regulator is as of now is just watching the situation and has asked MFs to do their best to avert a crises and recover their money.