Exit option to be given to retail investors
Mumbai—The Unit Trust of India (UTI) is working out a proposal to provide an exit option to retail investors, UTI acting chairman K G Vassal said adding that the Trust will submit the exit option to the government in 15 days. However it will continue with the ban on sale and repurchase of US-64 units till December. He also ruled out any financial bailout from the government.
Sources said the UTI think-tank is exploring the options to arrive at the repurchase price for US-64 units for small investors. These include making the scheme net asset value (NAV)-based, continuing with the administered pricing and offering a premium on the NAV.
US-64 has two crore unit holders spread across 40-45 lakh investors.
Back to News Review index page  

Banks to UTI's rescue
Mumbai—Four government-controlled banks are planning to extend loans to Unit Trust of India at interests below prime lending rates.
An official at one of the banks said, "Such loans will have a tenor of 90

To one year, after which it will be reviewed.

The move is aimed at enabling UTI overcome a possible liquidity crunch in the next couple of months. This could arise irrespective of the government’s stand on the present ban on US-64 sale and repurchase.
Another reason is the Trust needs close to Rs 1,300 crore to pay a 10 per cent dividend next month to unit-holders of its flagship scheme for the fiscal year ended June 30, 2001.
Besides, two of its schemes - a monthly income scheme MIP 96 (2) and an equity scheme, Equity Opportunity Fund have already matured and UTI will have to bear a redemption load of Rs 400-450 crore on these accounts.
Banks are now looking at the sort of securities that can be considered for the loans. Each of the banks may take an exposure of Rs 100 crore to Rs 250 crore.
Back to News Review index page  

UTI offloads Rs 600 crore bonds to UTI Bank
Mumbai--The Unit Trust of India is believed to have sold a sizeable chunk of its highly rated debt portfolio to its banking subsidiary — UTI Bank— since the last week of May.
Market insiders say that UTI Bank has in turn entered into one-to-one deals with a number of large institutional buyers to offload these securities from its portfolio.
Sources familiar with the deals said most of these bonds are tripleA and AA+ are nature.
As part of its treasury operation, the trust is also said to be selling its holding in government securities, though at a gradual pace.
UTI holds large quantum of corporate debt in its portfolio. It is not an active trader in the corporate bond market.
Back to News Review index page  

BSE imposes dummy circuit filters on 53 stocks
Mumbai--The Bombay Stock Exchange (BSE) has imposed a dummy circuit filter of 25 per cent on 53 stocks.
These stocks are constituents of the Sensex, the National Stock Exchange S&P CNX Nifty, or shares in which options trading has been permitted. According to the BSE, as and when the stock reaches either side of the circuit filter limit, the surveillance department will relax the aforesaid dummy circuit filter limit, irrespective of whether a scrip has hit such dummy circuit filter limit or not.
The dummy circuit filter is only to guard against errors/mischief by unscrupulous traders.
The best 5 rates window of these 53 scrips may indicate upper and lower circuit filter limits, which the brokers can ignore, the BSE said in its circular to members.

The BSE and the NSE measures follow the preposterous deals punched on Monday, Tuesday and Wednesday resulting in the halt of trading on the NSE on Wednesday. On Monday and Tuesday, the deals of ACC at Re 1 against its market price of Rs 144 and of Zee Telefilms at 50 paise created havoc in the market.
Back to News Review index page  

Rolling list not to be affected by changes in BSE-200
Mumbai—The Bombay Stock Exchange has said that proposed changes in the list of shares comprising its BSE-200 index would not alter the status of securities under rolling settlement.
Earlier in May the Securities & Exchange Board of India had said it would move all stocks which are on the BSE-200 to rolling settlement mode from July 2.
BSE had on May 26 announced that it would effect changes in the index from July 9, replacing eight stocks in the BSE-200.
This led to speculation that the new inclusions will be automatically shifted to the shorter rolling settlement cycle.
As a result media firms Balaji Telefilms and Mukta Arts, to be included in the BSE-200, fell by 5 per cent and 7.4 per cent on Wednesday. On Thursday afternoon, Balaji Telefilms was flat at Rs 209.50, while Mukta Arts was down 1.8 per cent at Rs 147.70 on the BSE. The benchmark exchange index was up 0.37 per cent at that time.
Back to News Review index page  

Schenectady announces public offer for stake in Herdillia
Kolkata--Schenectady (India) Holdings Ltd (SIHL) along with Schenectady International Inc (SIL) has made a public offer for the purchase of 20 per cent of the existing equity capital of Herdillia Chemicals for Rs 20 a share.
The offer opens on August 20 and closes on September 18.
SIHL has entered into a purchase and sale of shares agreement with Duncans Industries, the GP Goenka group flagship, to acquire 5,521,723 fully paid up equity shares of Rs 10 each in Herdillia Chemicals.
In accordance with Sebi regulations, SIHL along with SIL, are making a public offer to all shareholders of Herdillia to acquire up to 22,05,000 shares, representing 20 per cent of the outstanding equity share capital of Herdillia at Rs 20 per share.
Back to News Review index page