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Our Market Bureau
Mumbai, Aug 3: The Unit Trust Of Indias (UTI) flagship US-64 scheme has mopped up Rs 3,105 crore during its special-offer period in July. This marks a 30 per cent increase over the collections recorded in July, 1997. Of this, Rs 2,205 crore has come in the form of fresh collections and the balance through the reinvestment plan.
UTI officials said the scheme will definitely look at investing in equity given the good valuations in some scrips, but will not be going the whole-hog in pumping in money into equities.
UTI's two other schemes in the market too are faring exceedingly well, with the monthly income plan-III expected to raise Rs 1,600 crore as against Rs 800 crore raised by MIP-II, while its Bond Fund has already mobilised about Rs 200 crore.
In a related move, UTI has decided not pay a one-time custody charge to the National Securities Depository for US-64 units on the grounds that paying a charge of Rs 7 crore did not make commercial sense taking into account the upcoming BSE-sponsored Mumbai, Aug 3: The Unit Trust Of Indias (UTI) flagship US-64 scheme has mopped up Rs 3,105 crore during its special-offer period in July. This marks a 30 per cent increase over the collections recorded in July, 1997. Of this, Rs 2,205 crore has come in the form of fresh collections and the balance through the reinvestment plan.
UTI officials said the scheme will definitely look at investing in equity given the good valuations in some scrips, but will not be going the whole-hog in pumping in money into equities.
UTI's two other schemes in the market too are faring exceedingly well, with the monthly income plan-III expected to raise Rs 1,600 crore as against Rs 800 crore raised by MIP-II, while its Bond Fund has already mobilised about Rs 200 crore.
In a related move, UTI has decided not pay a one-time custody charge to the National Securities Depository for US-64 units on the grounds that paying a charge of Rs 7 crore did not make commercial sense taking into account the upcoming BSE-sponsoreddepository's proposed zero-custody charge.
Giving details of the successful mop up by US-64 in the month of July when the units were available for Rs 14, UTI executive trustee and officiating chairman PJ Nayak said that in July 1997, the Trust had raised Rs 2,391 crore through US-64.
Of the Rs 3,105 crore raised this July, about Rs 900 crore had come in through the reinvestment option where investors had preferred to take their dividend in the form of units.
The balance were fresh collections amounting to Rs 2,205 crore, a 35 per cent increase from last July's figure of Rs 1,635 crore. The response from the retail investors has particularly been stunning, showing a jump of 69 per cent in terms of mobilisation.
The amount mobilised from retail investors was Rs 826 crore as against Rs 488 crore last July. Institutions accounted for the balance Rs 1,380 crore of fresh collections, a 20 per cent jump over last years figure of Rs 1,146 crore.
Of this, more than 65 per cent of the amount mobilised was bybanks and institutions, but there were a large number of charitable trusts and port trusts which had invested in a big way.
The total collections in July across all schemes has been Rs 3,938 crore, a 27 per cent increase over last years figure of 27 per cent. The repurchases have logically been less considering the increase in sales. The figure has dropped 53 per cent to Rs 110 crore as against Rs 211 crore last July.
Nayak said that the Trust was well on way to its target of Rs 6,000 crore mobilisation for US-64 in the year. "We have already met 50 per cent of the target as typically happens in the month of July. The target for US-64 last year was Rs 4,668 crore. Our total target for this year is Rs 17,440 crore as against Rs 13,800 crore raised last year", said Nayak.
Of the Rs 3,105 crore raised in July, Rs 117 crore worth of applications had come seeking allotment in dematerialised form.
Nayak said that the collection figures show that UTI is still being able to access the retail investors, whichno other capital market institution is currently being able to do.
Nayak explained that the monies are still flowing in from the collection centres and these would be invested subsequently.
INSIGHT
Paucity of investment options helped
The rise in collections by the UTI reflects the paucity of investment options available to both institutional and retail funds today. At a yield of 14.28 per cent there is little by way of comparison for investments of a one year duration, perhaps with the exception of the badla market. More importantly, the yields offered have remained stable for the last two years. The conditions are also ripe for a good performance since UTI is cash rich simultaneously with a depressed market.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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