The mutual fund behemoth is also facing redemption pressure in its tax planning schemes that offer repurchase of units after the mandatory lock-in of three years. The combined unit capital of five master equity plans, which was Rs 3510 crore on June 30, 1996 is down to Rs 2762.08 crore as on June 30, 1998. However, this includes MEPs launched in 1996, 1997 and 1998, which are yet to open up for repurchase. If the mobilisation by these schemes is deducted, the unit capital of the five schemes comes down to Rs 2471 crore. This signifies a drop of Rs 843 crore or a little over25 per cent since June 30, 1996. ``Most of the MEPs launched by UTI have either failed to generate adequate returns or seen an erosion in unitholders' wealth. Thus, as and when these schemes come up for repurchase, they have seen a redemption of units,'' says an analyst.

MEP '95, which mobilised a record Rs 1157 crore, has seen its unit capital erode from Rs 1157 crore to Rs 984 crore in 1998, a 15 per cent drop in one year. The net asset value, which is below par at Rs 8.25, has led to a 17.5 per cent erosion in unitholder's wealth. With the NAV below par, the investible corpus has dropped from Rs 1332 crore in 1996 to Rs 847 crore as on June 30, 1998 with a one year return as on November 30, 1998 at a negative 14 per cent. Even the investible corpus of MEP '97, which mobilised a paltry Rs 73 crore, has dropped to Rs 68 crore in one year with its net asset value hovering around Rs 9. The worst hit is MEP '94 with its NAV at Rs 7.67, a massive 23.3 per cent below par. The scheme has given a negative returnof 10 per cent in the last one year. On the other hand, some of the MEPs, which have performed well, have also seen huge redemptions. For instance, consider MEP '93, where NAV is well above par at Rs 14.27 but the scheme has seen its unit capital fall 37 per cent from Rs 349 crore in 1996 to Rs 218 crore in 1998. In fact, MEP '93 has given the highest 3-year positive return of 3.74 per cent. ``It is a double edged sword for UTI where it has even seen redemption from schemes that have performed well,'' says a fund manager with a public sector mutual fund.

With the MEP in 1997 mobilising a mere Rs 21 crore, the latest in the series is unlikely to fare any betterin terms of mobilisation with the poor showing of most of the ELSS and the US '64 fiasco.