Millennium Manna
Unit Trust of India (UTI) chairman P S Subramanyam yesterday said domestic banks and financial institutions have the ability to subscribe to the Rs 10,000 crore disinvestment being planned by the government.
He said the second round of meeting between FIs and government is likely to be held either later this week or next week.
He said financial institutions have the ability to pick up the stocks provided the price is right and the scrip has the ability to give returns.
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Speaking to reporters on the sidelines of a convention on international organisation of securities commissions (IOSCO), he said: "UTI is flushed with funds and would be interested in buying the government stake as companies listed for disinvestment have good fundamentals and are worth investing."
The government plans to mobilise Rs 10,000 crore through
disinvestment in the current
fiscal and is in talks with the financial institutions on its modalities.
Subramanyam said UTI invested $ 2,50,000 in the recent Gas Authority of India Ltd (GAIL) global depository receipts issue, and would invest any such good issues.
On new schemes being planned by Unit Trust of India, he said it will be coming out with another monthly income plan next month with assured returns for 12 months.
Last month UTI had mobilised Rs 1,200 crore from monthly plan.
Earlier speaking on the role of FIIs in emerging markets, he said foreign portfolio investments have emerged as an important component of emerging capital markets.
The positive impact of foreign portfolio flows is---it increases visibility for a country and its corporates through spread of research on economies and corporates; increases market activity and catalyses improvements in market systems and infrastructure.
But the concern is that FII participation increases volatility in stock prices and poses a possible threat to currency and monetary stability.
On the Indian experience, he said FIIs have facilitated discovery and communication of hidden value in Indian economy and corporate sector through in-depth research and wider coverage.
He said India is emerging as one of the top destinations for global investments, and this will help accelerate foreign direct investment flows.
In the Indian equity market, FIIs have added to institutional activity and this translates into higher secondary market turnover and increase depth of the market.