Us-64 Loses Rs 550 Cr In 4 Days

Unitholders in Unit Trust of India's US-64 scheme have redeemed units worth over Rs 550 crore in the first four days (Monday to Thursday) of the current week, around Rs 50 crore more than the redemptions in the first quarter (July-September) of 1998-99.

The redemptions are almost double the figure claimed by UTI. Trust officials have maintained that average daily redemptions during the four days has been around Rs 70 crore, or a total of Rs 280 crore for the four days, which they say is normal.

UTI executive director Basudeb Sen yesterday admitted that Rs 550 crore had been redeemed from the US-64 scheme in the four days.

"Till October 8, the redemption of US-64 units has resulted in an outgo of Rs 550 crore," he said.

October 1 and 2 were public holidays, while October 3 and 4 were Saturday and Sunday, respectively.

Sen, however, maintained there was no reason for panic as the redemption figure of Rs 550 crore amounted to a mere 2 per cent of the corpus.

Sen said over 50 per cent of the redemption demand came from the western zone.

The north zone accounted for 25 per cent, and the balance was from the southern and eastern zones.

While UTI officials appear to be unperturbed, the redemption figures for October are on the higher side when compared with the figures for the first quarter of this fiscal.

Significantly, UTI officials have decided to monitor all large-redemption demands.

Senior UTI officials have told branch officials to keep them informed about large scale redemptions.

It is learnt that the sharp rise in redemption figures for October is due to some trusts selling their US-64 holdings.

Some small corporates have also offloaded their US-64 holdings in the past two days, though the amount is reported to be small.

"Certain small corporates too have redeemed their units. However, this is not because of the panic in the market, but because these corporates wanted money for expansion plans," Sen said.