MUMBAI, Mar 19: SBI Mutual Fund's Magnum Monthly Income Scheme 1998 (MMIS '98) has mopped up around Rs 100 crore. The scheme, which closed on Thursday, managed to raise another Rs 40 crore after it was extended on March 4, the initial closing date of the scheme. However, the amount mopped up by the scheme falls short of the initial expectations of Rs 250-300 crore.The collection, although below the fund manager's expectations of around Rs 250-300 crore, has crossed the targeted amount of Rs 50 crore mentioned in the prospectus.MMIS '98 (I) is a close-ended scheme with a tenure of five years and offers assured returns of 13.24 per cent annually and 12.5 per cent on a monthly basis. According to the offer document, 80 per cent of this amount will be invested in debt and 20 per cent in equity. However, sources say the fund is keen to invest around 90 per cent of the corpus in debt instruments.
The scheme has also received approval from the government of Maharastra as a "public security" for investments bycharitable trusts. The interest income earned by these charitable institutions is tax-free.
Although, the collections from charitable institutions could not be ascertained, a major portion of the Rs 40 crore which came in after the expiry of the first closing date seems to have come from this segment.
According to SBI Mutual Fund sources, a significant amount from charitable institutions has come from Maharashtra. SBI sources said the ICICI bond issue, which opened on March 16, has not had any impact on its collection figures. ICICI's issues comprises safety bonds with a annualised rate of return of 14 per cent.
LIC Mutual Fund's Dhanvarsha (11), another close-ended, five-year scheme which closed in February, was able to mop up only Rs 50 crore from the market. The scheme offered a assured return of 12.5 per cent in the first year.
MMIS '98 (I) offers four options - monthly income at 12.5 per cent, quarterly income at 12.64 per cent, annual income at 13.24 per cent. In the cumulative plan Rs 1,000becomes Rs 1,862 in five years. Last year, SBI Mutual Fund launched MMIS '97, a six-year close-ended scheme offering an assured return of 15 per cent per annum for the first year. The fund had been able to mobilise Rs 61.97 crore and the present net-asset value (NAV) of the scheme is Rs 9.86.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
