Financial Daily from THE HINDU group of publications
Friday, Jan 31, 2003

News
Features
Stocks
Port Info
Archives

Group Sites

Markets - Mutual Funds


`Bond scheme will deter unloading in US-64'

Our Bureau

CHENNAI, Jan. 30

UNIT Trust of India (UTI) hopes the proposed bond scheme for investors in US-64 will prevent a distress sale of equity and the consequent negative impact on the stock market.

The bond scheme "should prevent unloading", said Mr. M Damodaran, Chairman, UTI, at a press conference. He added that the bond scheme would, "defer the outgo from the Government, and the issue will get addressed partially".

Earlier, UTI had announced that unit holders in US-64, the troubled flagship scheme, who wish to exit the scheme at the end of May 2003 could either opt for cash or a 5-year tax-free bond. The interest rate on the bond, as well as the frequency of interest payment on the same is expected to be announced by the Government shortly.

According to Mr Damodaran, the current shortfall in US-64 is about Rs 5,000 crore that would have to be made good by the Government. Through the current scheme, UTI hopes that the Government's liability would be deferred.

Giving the background to the scheme, Mr Damodaran said UTI interaction with a cross-section of US-64 unit holders indicated that many of them invested with the objective of obtaining annual returns. Therefore, the present scheme has been designed to meet the objective of regular returns and liquidity (the bonds are tradable).

PTI reports: Mr Damodaran, who will be taking over as the Chief of UTI Mutual Fund after UTI's bifurcation (as UTI Mutual Fund and UTI-I) with effect from February 1, said that UTI mutual fund would be the largest mutual fund in the country.

He said UTI mutual fund would be a cent per cent SEBI- compliant company having the size of Rs 15,000 crore while UTI-I, would be of the size of Rs 31,000 crore after the bifurcation.To a question he said that NPA of UTI stood at Rs 7000 crore and there was provisioning for about Rs 6400 crore. UTI was utilising the Securitisation Act to the maximum for NPA recoveries.

Article E-Mail :: Comment :: Syndication

Stories in this Section
`Bond scheme will deter unloading in US-64'


Birla MF plans Bond Index Fund
Nifty BeEs bonus
Initial gains not held
FIIs pay premium for SBI shares
Sify plans to go for Indian listing
Funds active in Hughes Software
Satyam Comp: Buy Feb 240 calls
SEBI refuses to review share registry norm
FAPCCI contests common share registry order
Infotech stocks sizzle


The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |

Copyright 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line