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US-64 corpus shrinks as Unit Trust sheds stock flab

Mumbai, Oct. 17: Unit Scheme-64, the flagship scheme of the Unit Trust of India, has seen its corpus contract over the past few months in a squeeze that is widely believed to be a fall-out of the prune-equity drive.

At Rs 10,732.55 crore on September 30, the kitty had shrunk by Rs 567 crore from Rs 11,300 crore in the previous month. The year-end corpus stood at Rs 12,662 crore in June 30 this year. The total market value of the scheme’s equity holdings during the three-month period saw a substantial decline from Rs 8050 crore to Rs 6461.80 crore, a decline of around Rs 1589 crore.

The total market value of its investments at the beginning of the half year — July 1, 2002 — was pegged at Rs 12662.15 crore against Rs 10732.55 crore on September 30.

Significantly, the gross investment of Rs 4710 crore, which has been funded by borrowings, has significantly declined from the July 1 tally of Rs 5461.86 crore.

Government securities account for almost 30.75 per cent of US-64’s total portfolio, up from 28.28 percent on June 30, indicating that the mutual fund is going ahead with its strategy of piling on more debt than equity.

However, there has been change in the number of government securities held by the scheme during the period. Experts feel this either means that the schemes equity investments have been pared down, or the market value of equity investments has declined over the period.

Significantly confirming the market buzz, the scheme has pared its stake in Reliance Industries and Reliance Petrochemicals during the past three months (July 1, to September 30, 2002).

The scheme during the period liquidated almost 59.72 lakh shares of Reliance Industries while in Reliance Petroleum its holding fell by a whopping 1.32 crore shares.

The present holding in US-64 of RIL shares is around 3.83 crore shares while in RPL it hold's around 21.95 crore shares.

Its shareholding in ITC, Hindustan Lever, BSES and Infosys has virtually remained the same during the three month time frame. The holdings in MTNL and L&T have, however, declined marginally over three months.

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