It is estimated that out of the huge tranche of funds received by Reliance from its sale of stake in Jio Platforms, it is planning to invest Rs.35,000 crore into debt funds. Most of the funds are deployed into ultra-short and money-market funds, while some portion of the funds are allocated to debt funds with an average of 3-to-5 year maturities.

Big deals in the recent past has yielded Rs.153,000 crore from Jio Platforms, Rs.7500 crore from the sale of oil marketing JV to British Petroleum and Rs.13,200 crore from the rights issue. While actual details were not available, fund managers have estimated that RIL may have deployed close to Rs.35,000 crore into these low risk funds.

It is not just the mutual funds but even the currency traders are excited by the dollar flows. Currency traders have noted that the deluge of dollars for Jio Platforms had helped the rupee strengthen in the last few weeks. Clearly, a large allocation to debt funds could imply that the Reliance treasury expects dovish rates to continue in India.

This is, incidentally, not the first time that RIL has invested heavily in mutual funds. Back in 2017, RIL had invested more than Rs.7000 crore into longer duration debt funds betting on interest-rate declines. In the last few days, the shorter duration bonds have also seen a drop in yields due to the spike in demand for these funds at the short end of the yield curve.