This has provided the UTI top brass a platform to accelerate the restructuring of the scheme. "Though the Deepak Parekh Committee has set a three-year time frame for the scheme to be NAV-driven, it should be possible to achieve this in a shorter time span, without administering any shocks to investors and the market," said a UTI source.

Latest figures available with The Financial Express indicate that the redemption was around Rs 1,500 crore. With the shut period for sale and repurchase of these units beginning on May 18, there is no room for further redemptions.

The shifting of PSU stocks to a special-purposevehicle and 33 per cent rise in the Sensex since last December has helped prop up US-64's NAV by about Rs 2 on a conservative estimate made by The Financial Express. The NAV, which had slumped to an estimated Rs 9.57 as on December 31, 1998, has bounced to around Rs 11.50 now. This has helped narrow the gap between the NAV and the sale and repurchase price of the units.

Thanks to the redemptions, the unit capital of the scheme has come down to around Rs 13,500 crore from Rs 14,752 crore. The shift in PSU stocks at a book value of Rs 4,800 crore from May 1 to the special unit scheme as suggested by the Deepak Parekh Committee will add another 80 paise to the NAV.

UTI insiders say the game plan is to cash in on the market surge and set the tone for the revamp of the scheme which includes revision of dividend policy and changing the pricing strategy to narrow the gap between the NAV and unit price.

However, sources point out that, the UTI top brass is not leaving things to a chance with thefinancial year closure (June 30) a few weeks away. While the Sensex is linked to FIIs' fund inflows, the UTI is planning to play its own card to ensure supprort to key scrips in the event of a meltdown. How? It is sitting on a Rs 1,700-crore strong cash kitty collected from its monthly income plan. The count is expected to touch the Rs 2,000 crore target in a few days.

UTI can invest up to 25 per cent of MIP money in equities. Approximately, Rs 400 crore could be used to buy sensitive scrips. This, if won't prop up the market will at least help UTI hold the stocks which matter a lot to the US-64.

UTI sources say they have resorted to profit booking at every opportunity in the current market rally. Though FIIs have absorbed the sale, UTI resorted to "a great degree of churning to ensure that value stocks were not lost in the bargain."

As estimated by the Deepak Parekh Committee, the prop to NAV from the PSU stocks moving to SUS would have been around Rs 2000 crore. However, with the appreciation in thePSU stock since last December, the gap between the book value and the market value has been reduced to around Rs 1,100 crore to Rs 1,200 crore.

The UTI has already initiated a number of steps to overhaul the scheme including restructuring of the asset-management committees and inducting experts on the board of trustees.

UTI uses RBI window

The UTI tapped the Reserve Bank of India to meet the redemption pressure arising out of the scare generated by the US-64 over the last one year or so. Sources say that support from the RBI helped weather the storm and meet the redemption requirement in time.

At one point of time the UTI also used the repo facility to the extent of Rs 1200 crore for a very short period. ``The support from RBI helped UTI avoid any indiscrimate sale of securities in the market,'' pointed out a source. The repo deals have been squared now, he added.