Interestingly, this price is at a discount of 43 per cent to the scheme's net asset value (NAV). The NAV, as reported by Morgan on October 9, was Rs 9.44. The deals struck by Morgan were at the prevailing market price. The Morgan Stanley spokesperson, when contacted, declined to comment on the nature of transactions and the reason for the repurchase.

Fund managers, however, were of the opinion that the mutual fund could be picking up its units to prevent a further fall in its net asset value, which has come under strain due to the steep fall in the market overthe past few days.

Market sources say it is a wise strategy for a fund manager to buy back the units and reduce the floating stock in the market. ``This helps prop up the incremental NAV of the fund, especially when the units are trading at a huge discount to their NAV,'' added a broker. Sebi guidelines dated June 23, 1994, allowed funds to repurchase units from the secondary market based on prevailing market prices. The premium resulting from the repurchases is credited to the unit premium reserve, which helps prop up the NAV.

The `capital unit' of the fund, which in market terminology is referred to as the corpus of the fund, is Rs 789.3 crore (as on June 26, 1998). The initial capital unit was pegged at Rs 980 crore. The MSGF was launched on January 6, 1994, for a period of 15 years from the date of allotment on February 18, 1994.

MSGF has been underperforming the BSE-30 index by over 5-10 per since the last three quarters. However, the recent restructuring of the portfolio has helped the fund tooutperform the Sensex. The restructuring has brought Infosys Technologies, Container Corporation, Bhel, HDFC, Zee Telefilms, Burroughs Welcome and NIIT on the top of the 25 stocks which have a 80 per cent weigtage in the fund.