New Delhi, June 1: Mutual funds have gone from bad to worse. The combined loss on sale of investments of four funds comes to a staggering Rs 149.38 crore in 1996-97 as against a mere Rs 21.69 crore in the previous fiscal. For those who were doing well, last fiscal saw their performances dip. The profit on sale/redemption of investments (sample of five funds) has come down substantially to Rs 35.4 crore from Rs 231.65 crore in the previous fiscal.

One of the reasons for such a severe blow to the mutual fund industry has been the 300 point crash in the sensex on March 31, following the withdrawal of Congress support to the then united front government.Fiscal 1996-97 was one of tire and tribulation for the mutual fund industry. Faced with massive redemptions and sharp depletion in value of investments, the ordeal seems to have peaked during the year. So far, 15 funds have declared results for the fiscal 1996-97.

An overwhelming majority of funds also faced a fall in unit capital. In other words, more and more investors opted out of the funds. For instance, the combined unit capital of Canbank Mutual Fund has fallen from Rs 2137.51 crore to Rs 1935.5 crore in 1996-97. In the case of Kothari Pioneer's Prima Fund, there has been a run on unit capital which has dipped from Rs 110 crore in 1995-96 to Rs 31.67 crore in 1996-97. Likewise, the unit capital of ICICI Power Fund has dropped from Rs 80.21 crore to Rs 74.87 crore.

PNB RIPS '90, which opted for rollover in August, 1996, has seen its unit capital slump by Rs 40 crore to Rs 17.07 crore. For PNB Premium Plus '91, which suspended repurchase due to huge redemption requests, the unit capital has dropped from Rs 64.83 crore to Rs 57.76 crore. The Alliance '95 Fund from Alliance Capital is one of the few schemes to have booked a higher net profit on sale of investments. The profit stands at Rs 18.93 lakh against Rs 15.68 lakh in the previous fiscal. However, the fund's unit capital has nosedived from Rs 54.38 crore to Rs 35.82 crore. Also, the net asset value has fallen marginally from Rs 9.89 to Rs 9.79. The schemes from the Kothari Pioneer stable have been one of the worst hit in 1996-97. While NAV of Prima Fund has fallen from Rs 13.7 to Rs 10.18, that of Prima Plus has dropped from Rs 7.83 in 1995-96 to Rs 6.51 in 1996-97. The unit premium reserve for Prima Fund has depleted from Rs 20.59 crore to Rs 6.3 crore. In the case of Kothari Pioneer Bluechip, the unit capital has eroded from Rs 28 crore to Rs 4.39 crore as the fund was made open-ended in January this year and offered repurchase to its unitholders.

The schemes from Bank of India Mutual Fund have also fared badly during the year. In BoI Double Square Plus, for instance, the profit on sale of investments has fallen from Rs 104 crore to Rs 42.71 crore. Though unit capital has fallen by Rs 10 crore, NAV has slid from Rs 246.5 to Rs 208.3. In another scheme, Best-1993, the NAV of Plan A (growth scheme) has fallen below par to Rs 8.08 from Rs 13.7 in 1996-97.

Surprisingly, though 1996-97 was the year of income funds, the NAV of Plan B (income scheme) also stands eroded from Rs 9.5 to Rs 5.49.

While BoB Mutual Fund managed to prevent any erosion in unit capital, the NAV of BoB ELSS '95 has dropped from Rs 9.01 to Rs 7.82. The provision for depreciation in value of investments is much higher at Rs 11.98 crore against Rs 3.74 crore in the previous fiscal. Depreciation in BoB Growth '95 has shot up from Rs 3.86 lakh in 1995-96 to Rs 3.41 crore in 1996-97.The mutual funds from Canbank have been no exception. The combined profit on sale of investments has dipped from Rs 156.63 crore to Rs 7.44 crore. On the other hand, the fund has suffered heavy losses on sale of investments, which have galloped from Rs 11.77 crore to Rs 72.53 crore. The NAV of much-maligned Canstar has dropped below par to Rs 9.26 against Rs 13.16 in 1995-96, while the unit capital has dropped from Rs 618 crore to Rs 585 crore. The profit on sale of investments has eroded from a staggering Rs 58.76 crore to Rs 65 lakh. Canganga has also faced a run on its unit capital. It has nosedived from Rs 145 crore to Rs 85.85 crore.

Interestingly, though there are instances of funds holding on to their unit capital, there is not even a single fund which has witnessed an appreciation in its unit capital. That is a clear indication of investor apathy towards mutual funds in 1996-97.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.