MFs woo state-run companies

Fund houses are banking on short-term debt schemes like liquid funds and systematic investment plans (SIPs) to woo these companies.

"We are looking to device structured products for PSU companies. Their needs are different from those of other corporate clients," said J Bhattacharya, chief marketing officer, UTI Asset Management Company.

The company is offering three types of products, namely Liquid (daily), Liquid Plus (7 days' lock-in period) and SMPs (1 year lock-in period). Bhattacharya said a majority of the navratna and mini-ratna PSEs have already shown an inclination to invest with them.

"A majority of the companies investing with us are getting higher returns as compared to those from bank deposits. We have been working with PSUs for long and are thus aware of their specific needs," he said.

Last week, the Centre allowed 54 mini-ratna and 13 navratna PSUs to invest their surplus funds in any liquid, debt instruments and money market mutual funds of the three state-owned fund houses