Unit Trust of Indias flagship scheme, Unit Scheme 1964, has garnered a hefty Rs 2,300 crore in July. This is about Rs 1,000 crore higher than the amount mopped up by the scheme in July 1996.
Senior UTI sources confirmed to Business Standard yesterday that the US-64 collections this year have been significantly higher than last years figures. Of the Rs 2,300 crore raked in by the scheme, a hefty Rs 1,500 crore has come by way of fresh purchases from unit-holders, while re-investment of dividends has accounted for another Rs 800 crore.
The Trust had mopped up Rs 700 crore in the form of fresh funds and Rs 600 crore by way of re-investment of dividends in July 1996, said senior Unit Trust officials.
The US-64 units were sold at a concessional price of Rs 14 per unit during July 1997, while the repurchase price was pegged at Rs 13.70. July is traditionally the month when US-64 prices are at their lowest level for the year.
The last few days of July are also the days when there is a massive rush from unit-holders to put money into the US-64 scheme to avail of the concessional pricing.
The massive collections of the US-64 scheme have reinforced the view that unit-holders are flocking back to the mutual fund major, following the shake-out in the fixed deposits market and among non-banking finance companies (NBFCs) in the aftermath of the CRB scandal.
UTI had expected to mop up around Rs 2,000 crore in July, following the financial sector developments and the increasing inflows towards the end of the last f iscal.
The massive collections mopped up by Unit Trust this July bring to mind the heady days of July 1994, when inflows of Rs 3,000 crore poured in after the scheme announced a rights offer for those buying units in July. ``Those were also the days of 26 per cent dividend, pointed out officials.
Thereafter, Unit Trust slashed the US-64 dividend to 20 per cent in 1995-96, but backed it up with a 1:10 bonus issue. In 1996-97, UTI maintained the 20 per cent dividend level, which worked out to a 22 per cent dividend on the schemes pre-bonus capital.
However, collections for the Monthly Income Plan III have fared poorly in comparison with earlier tranches. The schemes current tranche which is slated to close on August 3 is expected to end up with about Rs 600 crore.
This is lower than the Monthly Income Plan II levels of over Rs 1,000 crore, since the interest rates have fallen and a lot of funds had flowed into the earlier tranche.
The next tranche of the Monthly Income Plan scheme is set to offer 12.5 per cent returns, against the 14 per cent offered by Monthly Income Plan II. The Trust has already submitted the scheme for the Securities and Exchange Board of Indias approval and will launch it thereafter.
Buoyed by the uptrend in retail investor interest, Unit Trust is planning to launch a number of schemes before the end of the calendar year.
Unit Trust officials say the accent will be on launching equity schemes, since the domestic stockmarkets are looking up these days.
The Trust also plans to tap the off-shore funds segment, since it believes that overseas investors have a significant appetite for Indian funds. A number of European arrangers are also in talks with Unit Trust of India for launching such funds in coming days.
