As per figures collated by the BSE, the UTI Master Gain counter recorded a record 16,100 units being offered for auction, followed by UTI Master Plus at 6,200 units, UTI Master Growth '93 at 3,200 units and UTI Grandmaster at 1,000 units.

According to market experts, signature difference has been the main reason for the rise in bad delivery in the case of mutual fund units.

"If one should consider the rising volumes in bad delivery auction as an abnormal case, the story behind the curtains is the attempt made by small investors to book profits at these counters," said the fund manager of a leading FII firm.

Besides signature differences, many have cited the increasing level of confusion among the unit holders with reference to the units held in the name of minor as another reason.

It may be recalled that the BSE had formulated a set ofguidelines to identify good and bad delivery shares in the latter half of 1997, which is yet to be cleared by SEBI. Besides this exercise, BSE had, along with SEBI, also streamlined certain norms exclusively built for unit holders, especially for those units which are held in the names of minors.

Interestingly, the prices of these units have been gaining substantially over the past five settlements with most of these units quoting at a premium to the par value of Rs 10, the price at which the units were issued.

"The market prices look more attractive than the repurchase prices and, hence, small investors have been getting back to the local bourses to book profits," said a BSE broker. "However, they continue to remain ignorant about the transfer mechanism involved," he explained.

Currently, UTI Master Gain is quoted at Rs 11.60, while UTI Master Plus is being traded at Rs 18.50, UTI 2000 at Rs 13.15, UTI 5000 at Rs 15.50, UTI Growth Master '93 at Rs 11.25 and UTI Master Growth at Rs 12.05.

Similarly,in the case of other mutual fund units like SBI Magnum '93 and Ind Jyoti (A) and (B), the bad delivery auction has seen a high of 3,700, 1,300 and 3,000 units respectively.