Us-64 Redemptions Down To Rs 2200 Cr

The flagship scheme of Unit Trust of India (UTI), Unit Scheme 1964 (US-64), has witnessed redemptions to the tune of Rs 2,200 crore for the year 1997-98.

However, the redemptions, though substantial, are not bad news for the trust, since collections in the scheme have been higher, at Rs 4,700 crore, including reinvestments of about Rs 700 crore, UTI officials said yesterday.

This means UTI is on a net positive situation as far as US-64 goes, with the net inflow pegged at Rs 2,500 crore in the scheme. This is a significant turnaround from the previous year's situation of a net outflow. During 1996-97, US-64 sales were to the tune of Rs 1,700 crore, with redemptions at Rs 2,500 crore, leading to a net outflow from the scheme. This year, however, the situation has been reversed. US-64 is at present in its book-closure period, which began on May 18 and will continue till June 30, both days included.

US-64's inflows have been a major help for UTI to get to its target for the year of Rs 12,000 crore, which the mutual fund major is confident of touching by the end of June. The fund has already launched two more equity schemes before the year is over -- the Master Value Fund and the Master Index Fund -- to garner in new monies by the end of the year 1997-98. UTI has a July-to-June financial year.

While the Master Value Fund focuses on B1 and B2 stocks which are felt to offer high-value and growth in investments, the Master Index Fund is UTI's first ever passive index fund which will replicate and track the Bombay Stock Exchange 30-share Sensitive index. With no redemption pressure, UTI now has funds to pump into the secondary market as the prices look more attractive at lower levels. Apart from the two new schemes, 20 per cent of the monthly income plan can also be pumped into the equities market.

For 1998-99, UTI is expected to set itself an ambitious target of Rs 16,000 crore in terms of resource mobilisation for the trust as a whole. This also reflects UTI's bullish view of the stockmarkets, and the fact that it expects substantial funds into its schemes the coming year.

With an infrastructure thrust in this year's budget, UTI also expects to launch offshore funds aimed at the core sector.

However, the entire institution is now eagerly awaiting an announcement relating to the appointment of a new chairman in case its present chief G P Gupta is appointed chairman of the Industrial Development Bank of India (IDBI) after present IDBI chairman S H Khan completes his term.