Senior Trust officials said that the current valuations are too tempting to resist investing in equity and any restructuring would have to wait for the opportune time when stocks can be offloaded and investments be routed to debt instruments. "The current valuations available in the market are very attractive and thus we are getting a very good bargain at these levels," said the executive trustee of UTI, PJ Nayak.

"For the past three weeks, we are investing the fresh corpus of US-64 heavily in the equity markets and refraining from investing in debt. As and when the markets go up, we will liquidate our portfolio and then move towards debt. We are predominantly largely investing in equity as a strategy for the medium term," says Nayak.

Although Nayak refused to divulge the exact quantum of money going into equity markets, market circles point out that UTI was merely absorbing stocks which were being sold but without creating a demand. "The moment demand factor from UTI comes in, the markets will start moving up," said a market participant.

US-64 had mobilised Rs 3,015 crore in July's special offer.

UTI maintained an income distribution of Rs 2 per unit (20 per cent) on its flagship US-64 for the third year in a row. The US-64 scheme will face an acid test this year since its equity investments are currently high at 65 per cent of investible funds and debt component is at 35 per cent.

This means that bulk of the resources for next year's dividends will have to come from booking capital gains on the equity portfolio.

MIP mopup seen at Rs 1,500 crore

The Monthly Income Plan (III) scheme of UTI has mopped up Rs 900 crore and hopes to raise another Rs 600 crore on the last day tomorrow.

In a bid to facilitate retaining any subscriptions in excess of Rs 1,500 crore, the Trust has sought SEBI approval to retain upto Rs 2,000 crore and refund subscription beyond this level. This is one of the best mop-ups ever for an MIP scheme.

"We are expecting to close the scheme with collections of Rs 1,400-1,500 crore. The MIP (III) plan is more successful than initially envisaged. The euphoric response is also because we had two MIP schemes being redeemed during end-June, one of which was in existence for four years and another for five years."