Mastergain 92 Redemptions Plunge To Rs 133.5 Crore

This, when compared with the corresponding two-month period last year, reveals redemptions to be a mere 11 per cent of previous year's level. The Mastergain '92 scheme remains open for repurchase for a period of two months every year from August 1 to September 30, 1996.

Business Standard had earlier reported of the sharp fall in redemption trends, which were evident even in the initial 15 days of opening for repurchase. According to marketmen, usually, most of the redemptions take place in the first 15 days after the scheme opens for repurchase.

Of the total redemption of Rs 133.5 crore this year, Rs 24.3 crore have been on account of switch-overs to other open-ended schemes of UTI.

The redemption each year is on an average up to 25 per cent of the original corpus of the scheme. Last year, of the total redemptions of Rs 1,175 crore that the scheme had faced, the switchovers were to the extent of 55 per cent of the total figure.

The attitude of the investors to hold on to their units, which is amply evident from the above trend, has eased the pressure considerably for UTI, which was, till recently, facing a spate of redemptions from its schemes.

According to senior officials of UTI, the investors have preferred to stay in the scheme due to several factors. Among the main reasons is an indication of regained confidence in the investors minds about the scheme and the UTI itself. Another reason for the rate of the redemptions for Mastergain being low is that the scheme is to go open-ended from January 1, 1997. Once that happens the investors would have the freedom to plan their entry and exit according to their needs and hence may have decided against redeeming their units now.

The open-ended factor apart, the decision of UTI to declare a dividend for Mastergain is another factor which the Trust feels has played a part in stemming the redemption pressure. The dividend is a signal to investors that the scheme is doing fairly well and is sharing the benefits with unitholders.

The Mastergain '92, commenced with an initial corpus of Rs 4,712.10 crore. It had the distinction of finding its way in the Guinness book of world records for having the largest number of investors had run into a lot of problems relating to the servicing the large investor-base.