The net asset value of Double Square Plus, due for redemption at Rs 400 per unit in August next year, has vaulted by more than 52 per cent since the beginning of this year. The NAV, languishing below Rs 200 (Rs 198.32 on January 6, 1999) touched a high of Rs 302.20 on August 18. The market has risen by a good 110 points since then, which will further buoy the NAV. During the same period, the Sensex has risen by 51 per cent from 3060 on January 1 to a level of 4621 points on August 17.

With a unit capital of Rs 351.45 crore, the liability for the AMC in BoI Double Square Plus comes to Rs 1405.8 crore on redemption. With the NAV rising to Rs 302.20, the scheme still faces a shortfall of Rs 98 per unit which translates into a gap of Rs 344.42crore.

``The scheme has managed to redeem itself to a considerable extent from the mess it was into with the NAV below Rs 200,'' says an industry observer. With a net asset value of Rs 198, the gap per unit was a staggering Rs 202 per unit or Rs 710 crore.

``With a year to go, active fund management will help the NAV move closer to the target of Rs 400. The NAV has grown by over 52 per cent in just 8 months whereas it has to rise by another 32 per cent in the next 12 months to bridge the gap,'' said a fund analyst. The growth in NAV and consequently, the narrowing gap should come as a relief to Bank of India, whose profits for the year ended March 31, 1999 had slumped by 45 per cent to Rs 201 crore.

``Ultimately, the sponsor, Bank of India will have to step in and pay for the shortfall. It is good for the bank's balance sheet,'' said an industry observer.

BoI AMC had promised its original allottees to repurchase units at Rs 200 from September, 1995 and at Rs 300 from September, 1998.

After a littleover three years, the NAV of the scheme has gone past the current repurchase price of Rs 300. In September, 1995, while the NAV of the fund was Rs 250, it had continued to repurchase units at Rs 200 from original unitholders.