These investors are holding over 3.3 crore units with a face value of Rs 33.1 crore. Based on the latest repurchase price of Rs 30.50 per unit with effect from September 18, 1998, the the asset management company owes these investors a little over Rs 100 crore. On the other hand, with an NAV of around Rs 10.14 as on October 23, the AMC faces a shortfall of around Rs 67 crore.

The Canstar scheme, which has two plans capital growth and section 80L tax benefit, ran into rough weather as the performance did not match the promised repurchase price.

Last year, Canara Bank made an open offer to purchase all the units at Rs 23 per unit. Following this, the bank today holds 94 per cent of the units, according to the balance sheet of thescheme. Canara Bank had spent over Rs 900 crore to buy these units from the public. The repurchase of the scheme was suspended from September 18, 1996.

The combined unit capital of the scheme is Rs 603 crore. The Canstar scheme was floated in 1990 for a period of ten years with the objective of growth and an assured repurchase price after the third year.

The repurchase price was to begin with Rs 15.15 and go up progressively to Rs 40 after completion of 10 years. With two more years to go, the scheme's repurchase will go up from Rs 30.50 as on September 18, 1998 to Rs 35 as on September 18, 1999 and Rs 40 in September 2000.

This calls for a dramatic turnaround in the performance of the scheme. The fund has been restructuring the portfolio of the scheme progressively from shifting focus from equity to debt. It liquidated a sizeable number of unproductive equity investments during 1997-98.

As on March 31, 1998 nearly 39 per cent of the schemes portfolio was in equity, with a market value worth Rs323.63 crore. The exposure to debenture was 17.82 per cent, while bonds accounted for 10.39 per cent of the portfolio. The scheme's exposure to dated government securities was 16.47 per cent and 7.42 per cent in treasury bills. Overall, nearly 60 per cent of the portfolio is invested in fixed income debt instruments.

Despite the restructuring, a lot depends on the revival in the stock markets.