UTI to sell L&T, BSES, Modi Rub stakes

Mumbai: Unit Trust of India (UTI) is exploring possibilities to sell its holdings in three leading Indian corporates: Larsen and Toubro, BSES and Modi Rubber. The company has already sold its stake in Reliance Industries Ltd (RIL) and is now looking at disposing of its entire 11.8 per cent holding in ITC Ltd.

Confirming the development, a senior UTI officials says: "If UTI is getting double the price than the current market price we will sell our stake in L&T, BSES and Modi Rubber. All depends on the prices."

UTI, the largest mutual fund in India, has already sought the governments approval to divest its holdings in these three companies.

Says a UTI official: "There is nothing unusual about it. Last month, three of our schemes MIP 97, Institutional Investors Special Scheme and MIP 95 matured. Once the schemes get matured, we can sell our holdings. From the sale of Reliance stocks alone we have made a profit of over Rs 970 crore. Besides, as per the new regulations of the Securities and Exchange Board of India, UTI cannot keep more than 10-per cent stake holding of any corporate."

In each of these companies, UTIs holding is between 10 and 15 per cent. In L&T, UTI has 9.5-per cent stake, while in Modi Rubber it has a holding of more than 14 per cent. In RIL, UTI had around 10-per cent stake.

Over the course of fiscal 2001-02, UTI has sold large stakes it once held in some of Indias blue-chip concerns. Apart from RIL, UTI has sold major chunks in Hindustan Lever, ITC and Infosys during fiscal 2001-02, reducing its shareholding in these companies by almost half.

UTI has sold almost 3 crore shares of HLL in the 2001-02 period, netting between Rs 650 crore and 750 crore. It has, however, bought around 4 lakh shares in the last two months. Over the past fiscal, the price of HLL touched a low of Rs 181 in September 2001 and a high of Rs 266 in March 2002. The shareholding of UTI in the company has fallen from almost 4.2 per cent in March 2001 to just 2.8 per cent in March 2002.

In Infosys, it has sold off more than 22 lakh shares in the year ending March 2002 with hardly any purchases in the last two months. Between 2001 and 2002, Infosys touched a high of Rs 4,861 and a low of Rs 2,156.

Even at an average price of Rs 3,500, UTI must have netted more than Rs 800 crore from the sale of Infosys shares alone. This has led to UTIs shareholding in Infosys falling from 8.38 per cent in March 2001 to 4.9 per cent in March 2002.

UTI has also sold off large blocks of shares in other bluechips, such as ITC, State Bank of India, Tisco and HDFC. In Tisco, too, the trust has sold off more than 78 lakh shares of the company in the 2001-02 period.