Indian Express: US-64 mops up Rs 3,105 crore

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US-64 mops up Rs 3,105 crore

ENS ECONOMIC BUREAU

MUMBAI, Aug 3: Unit Trust of India's (UTI) flag ship scheme, US-64, has mopped up Rs 3,105 crore during its special offer period in July 1998. This marks a 30 per cent increase over the collections recorded in July 1997.

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 Ltd (NSDL) for the US-64 units on the grounds that paying a charge of Rs 7 crore when the BSE sponsored depository which has promised a zero custody charge, is round the corner, did not make commercial sense.

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 Dr PJ Nayak said that in July 1997, the Trust had raised Rs 2,391 crore through US-64.

Out of the Rs MUMBAI, Aug 3: Unit Trust of India's (UTI) flag ship scheme, US-64, has mopped up Rs 3,105 crore during its special offer period in July 1998. This marks a 30 per cent increase over the collections recorded in July 1997.

Out of the Rs3,105 crore, 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 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 being 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.

The total collections in the month of 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 6000crore 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.

Nayak said repurchases of US-64 were only Rs 110 crore in July 1998 against Rs 211 crore in July 1997 which is an increasing sign of people being content with holding the units.

He said the mobilisations also demonstrate that UTI is still able to access retail investors even though US-64 is not an assured returns scheme. He said in 1994, US-64 scheme had mobilised nearly Rs 7,000 crore, but the mobilisation then was driven by prior announcement of a rights issue at a discounted price.

Net Express

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