But most MFs, when contacted by The Financial Express, which include JM Capital Management, Kotak Mahindra Mutual Fund, Sun F&C Asset Management and Sundaram Newton Asset Management, denied any redemptions pressures as of now.

Chiefs of most MFs said that since many are long-term investors and NAV of the funds are at such low-levels, there has not been any significant redemptions. Speaking to The Financial Express, Amfi chairman AP Kurian said: "It is not in the interest of investors to redeem with NAVs fallen so low."

Many feel that the present situation in the market is short-term in nature and would get sorted out. Speaking to The Financial Express, UTI chairman PS Subramanyam said: "The market bottom has been sound. The finance minister's assurance for corporatisation of the BSE has boosted investors' confidence."

Seconded Sun F&C Asset Management Company chief executive officer Nikhil Khattau: "Fundamentals are good. The panic in the market is exaggerated due to the uncertainty in the market."

MFs chiefs feel that the Securities and Exchange Board of India (Sebi) is moving in the right direction with its stand in the context of corporatisation of exchanges, rolling settlement and that no brokers would become directors in the BSE.

Kotak Mahindra MF chief executive officer (CEO) Shekhar Sathe said: "If Sebi seriously implements these measures, it would address the cause of concern. What we are seeing today is more than the systemic risk." Added JM capital Management CEO Krihnamurthy Vijayan: "One will have to vouch for the next settlement."

Since the present market situation is expected to be a temporary phase, many felt that this is a good time for bargain-hunters. They feel that if investors buy units at this point in time, they can get good returns over a one year period

According to Sundaram Newton Asset Management Company fund manager Anand Radhakrishnan: "The payment crisis has given long-term investors a good opportunity to acquire a basket of securities at very reasonable valuations and they should not miss the wood for trees."

According to Mr Sathe, investors should start in a small way and not go overboard. Fund managers are also of the opinion that even for MFs, it is the right time to buy stocks especially of companies who are market leaders in their industry segment. "Since the past few days we have been buying whenever the market has been nosediving," said Mr Subramanyam. However, looking at the inflows by MFs, most of them do not appear to be buying. "Mutual funds are not buying because money has to flow-in to buy" said Mr Vijayan.