At the same time, institutions should adopt a collective approach when deciding whether or not exiting from a company is in the interest of their shareholders. Subramanyam's comments come in the wake of several hostile takeovers witnessed in the recent past and the role of institutions who have been large shareholders in these companies.

"There are two institutions. One section comprises the lending institutions, which acquire a stake in a company by subscribing to the equity through the primary market route. At times they take a stake in a project which they fund. On the other there are, institutions like UTI, LIC, GIC which are investment institutions. We, therefore, route ourinvestments through the secondary market and there is, therefore, an inherent difference in the price at which we have bought a stake in a company and the one at which the lending institutions have," said Subramanyam.

"Therefore, while it makes sense for institutions to take a common view on issues like the merit of acquisititon, the profile of the acquirer and his ability to bring better value etc., the common approach should end there. The price at which the shares should be sold and the extent of holding that needs to be offloaded is a decision which should be taken by an institution individually," said Subramanyam.

On the role of UTI bringing in greater corporate governance in the Indian corporate world, Subramanyam said corporate chiefs have told him that it is in the enlightened interest of a corporate to bring in corporate governance. "This is the ultimate goal and UTI will play its role in acheiving this.

Faced with pressure from shareholders, corporates are already beginning to adopt bettercorporate governance. Institutions have to give a push to this and, in that sense, it has to be a supplementary role that we have to play by strengthening the resolve of the companies who are keen to put better governance practices in place," said Subramanyam. "We would like to look at this in a positive manner and look at helping companies achieve better levels of corporate governance," he added.