Cash-rich IT giant Infosys slashed its exposure to liquid mutual funds by a whopping Rs5,600 crore (over USD one billion) during the first quarter of 2013, as yields on such investments are expected to flatten.
Country’s second largest IT services exporter, which had ramped up its investments in debt mutual funds to an all-time high of Rs7,365 crore at the end of 2012, reduced exposure to Rs1,739 crore during January-March quarter of 2013.
Returns on liquid mutual fund schemes typically peak off towards the end of the year. liquid funds are generally seen as investment instruments suitable for parking money for tenures of less than 3 months.
“The shift is purely a decision based on what yield we get on our investments,” Infosys director V Balakrishnan, who has earlier been its chief financial officer, told the news agency.
At current level, Infosys’ liquid MF exposure is lowest since the Rs32 crore recorded at the end of January-March 2012 quarter. large corporates use liquid debt MFs to park cash for short-term and also earn good returns, while waiting to deploy the funds for future projects.
After increasing its liquid MF exposure for consecutive quarters up to December 2012, debt-free Infosys’ latest portfolio move coincides with the industry-wide over Rs1 lakh crore outflows seen in liquid funds in March. PTI