Uti Redemptions At Rs 10,000 Cr

Unit Trust of India has paid out a hefty Rs 10,000 crore by way of redemptions and repurchases during 1997-98.

However, despite the huge payments made to investors, the Trust managed to garner net inflows, which are expected to be in the region of Rs 13,000 crore for 1997-98.

UTI's total corpus now stands at about Rs 59,000 crore. UTI has a July to June financial year.

UTI executive director Brij Gopal Daga and chief general manager A G Joshi told Business Standard that of the total payout figure of Rs 10,000 crore, a substantial portion was by way of payments for schemes which came up for redemption. Nine domestic schemes were redeemed by the Unit Trust of India during the year.

 

The actual repurchases, therefore, were much lower, at Rs 4,600 crore, the officials said.

The redemption pressures as a whole, were much less during the year than they were in 1996-97, Daga said, indicating that the year had been a much better one as a whole for the Trust.

As reported earlier in Business Standard, the redemptions for US-64, the flagship scheme, have also been under control at Rs 2,200 crore, with Rs 4,700 crore coming in as inflows, leaving a net inflow situation. With a better year, there is therefore a distinct possibility of the 20 per cent dividend being maintained by the scheme.

Daga said the secondary market sales by UTI were a direct function of the investors' wish to pull out of the schemes. "If investors want to pull out, we have to sell. Besides, we buy and sell based on the perception of the market", he said, commenting on UTI's role in the present market scenario. Daga declined to say how much UTI had bought and sold over the past few days since the Budget, but said overall it has been a clear net buyer in the recent days.

US-64 has already got a demat option for unitholders, introduced in late-April. Under this option, the unitholders can hold the units in electronic form after enrolling themselves with a depository participant.

Prospective unitholders joining the scheme from July 1,1998 at the special price will also be able to avail of the demat option, which is being seen as a move which would boost the liquidity of US-64.

UTI will announce the final collection and redemption figures on June 30, along with the dividends for schemes for 1997-98. The Trust has upped the collections target for 1998-99 at Rs 16,000 crore, in line with its bullish outlook on the market.