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It's like any other day at UTI


Our Bureau

MUMBAI, Aug. 1

IT turned out to be a false call on Unit Scheme-1964 (US-64) redemptions on the first day when UTI opened the repurchase window after a gap of two months today. UTI received 3,865 repurchase requests, from all of its branches across the country, covering 56.39 lakh units, UTI said in a statement today.

The value for all the units tendered today for repurchase works out to about Rs 5.639 crore, far less than what was feared and which is considered ``normal'' by UTI officials and independent market observers.

The UTI Chairman, Mr M. Damodaran, at a conference organised by the Press Club, here, said that UTI proposes to launch new schemes to garner fresh funds and continue to play a dominant role in the markets.

Contrary to the fears of expected long queues, the work pressure, including that of US-64 redemptions at UTI offices was normal. The officials handled the situation just like any other normal day.

``The market seemed unduly worried about UTI's ability to meet the redemptions pressure,'' analysts said. Even though there were queries by members in the Rajya Sabha on UTI's involvement in the financial crisis, investors did not seem to be in panic.

According to the preliminary data reported by various UTI branches, average units per redemption application works out to 1,459 units ``suggesting that only those small investors who are really in need of funds might have come forward for repurchase.'' U TI said that on August 1 last year, it had received 2,306 requests for 45.66 lakh units. Similarly, on July 3, 2000 (first day after book closure in June 2000) 1,571 requests were received covering 22.68 lakh units.

The UTI Chairman had said that UTI had made standby arrangements with a consortium of banks to provide liquidity support of over Rs 10,000 crore.

Our New Delhi Bureau reports: There was a lukewarm response for redemption of US-64 units across the North when the repurchase window was opened today.

A total of 660 applications were filed in 16 branches of UTI, according to reports. The total number of units offered for redemption was 9,40,000 units for which the UTI's total pay-out will be Rs 94 lakh.

The UTI is offering redemption of up to 3,000 units per small investor, but it appears that many investors are redeeming only part of their holdings.

However, the trend is expected to be clear in a few more days.

Our Kolkata Bureau reports: On day one, there were few takers for US-64 here, and redemption requests put in at the special repurchase counter set up at UTI's local office were few and far between.

The situation, UTI sources pointed out, clearly reflected the mindset of investors. The majority of investors would rather wait for the situation to turn better. The best effort would be made to speedily process the applications that had been received, t hey added.

UTI had made special, country-wide preparations to cope with repurchase requests, and even a drastic increase in the number of applications would not really have meant much of a strain on its systems, it was said.

Pic.: No queues as US-64 repurchase window opens: An investor seeking help from another to withdraw funds at a UTI office in the Capital on Wednesday.

Picture by Ramesh Sharma

Related links:
UTI geared for redemptions
US-64: 3000-unit limit may be enhanced -- Mr M. Damodaran, Chairman, Unit Trust of India
US-64 exit level set at 3,000 units -- Repurchase facility from Aug; to be NAV-based from Jan, 2002

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