Rs 2,302 Crore Uti Redemption In May

Unit Trust of India faced massive redemptions worth Rs 2,302 crore in May. The redemption in its flagship scheme US 64 was close to Rs 2,000 crore, according to estimates. UTI executive director B G Daga said that this was unofficial estimate and the actual figures were yet to be computed.

UTI is expected to take a final decision on the fate of US 64 on July 2 when its board meeting would consider the results for the year 2000-01 (July-June). At present, the MF is struggling with the huge redemption pressure.

Much of the rush for redemption is being seen as a pure panic reaction from investors who apprehend an erosion in their holdings once the scheme becomes NAV-based.

According to UTI officials, it is only the redemptions from US 64 that the Trust has been hit with. Otherwise, its collections are more or less at par with other funds which would have collected roughly Rs 230 crore each. Sales of UTI were at Rs 376 crore in May.

While other funds, especially those in the private sector, have been witnessing a flow of corporate money, UTI is attracting largely retail money.

Trust officials said that this was a pointer to investors