SBI clears Rs 1,500cr for UTI
New Delhi—UTI’s troubles may be at an end. Some of its immediate problems seem to be clearing with the State Bank of India agreeing to provide UTI a line of credit to the tune of Rs 1,500 crore against collateral.
UTI is working out similar credit lines with Corporation Bank and a few other PSU banks.
With this corpus in hand, the UTI board, which is meeting on Thursday is expected to work out the precise nature of relief to be given to the small investors in US-64.
The board is said to be facing the dilemma of defining a small investor, which could have 1,000 units, 2,000 units or 5,000 units? Even if the definition is pegged at any of these levels, then an investor with 2,001 units could approach the court saying that keeping him out of redemption is against the principles of natural justice.
Thus tomorrow's meeting will sort out a number of tricky issues. After that, there is likely to be a wider discussion, possibly including one with the finance minister, before a formal announcement is made for relaxing the freeze of sale and redemption of US-64 units.
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Tata Sons raises Rs 100cr through NCDs
Mumbai –Tata Sons has raised Rs 100 crore from the captial market through private placement of non-covertible debentures.
The proceeds of the issue, which was oversubscribed by 100 per cent, will be used for meeting its long-term fund requirements and for general corporate purposes, DSP Merrill Lynch, the arranger to the issue, said in a release here on Wednesday. The issue, comprised of a three and a five-year option, was for a base amount of Rs 50 crore with the option to retain over-subscription, Merrill Lynch said, adding the company opted to retain the entire amount of over-subscription.
Price discovery was done through the book-building process and the final pricing achieved was 9.65 per cent for the five-year (three year put/call) option and 9.85 per cent for the five year option, it said.
The debenture, rated 'AAA' by credit rating agency Crisil, was offered to and subscribed by banks, institutions and corporates, DSP Merrill Lynch said.
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BSE launches free float index for IT, media
Mumbai—The Bombay Stock Exchange has launched 'BSE TECk' index, the free-float based index designed to track the knowledge-based sectors of information technology, media and telecommunication. With this, the BSE indices have increased to 13.
However, unlike the other equity indices, BSE TECk takes into account market capitalisation of non-promoter holding and not the entire equity capital, BSE said. The market capitalisation of the company in the composition is adjusted to reflect only the free float portion.
The composition of the index includes select 21 companies from technology, media and telecommunication sector. The companies are Infosys Technologies, Wipro, Satyam Computers, HCL Technologies, NIIT, Hughes Software, SSI, Silverline Technologies, Digital Equipment, Visualsoft, Moser Baer, Zee Telefilms, Pentamedia Graphics, Saregama India, TV 18, Mukta Arts, MTNL, VSNL, HFCL, Sterlite Optical Technologies and Global Tele Systems.
The companies account for around 90 per cent of the total market capitalisation of all the TMT companies listed on the BSE.
The base value for the index has been fixed as 1,000 points and base date as April 2 ‘01.
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When brokers strike
Mumbai-- Brokers across the country are going on strike to protest against the introduction of compulsory rolling settlement system and the huge increase in turnover fees.
Brokers at Ahmedabad and Lucknow are already on strike and there was no trading on the Ahmedabad Stock Exchange on Wednesday, as the brokers’ strike entered the third day.
Their Bangalore colleagues are threatening to go on strike on Friday, July 13.
Mumbai brokers are scheduled to take out a ‘morcha’ on Thursday to the office of the regulator, Securities and Exchange Board of India.
The strain is showing in the bottomline of not only broking firms but also most exchanges, which depend on trading for their income. With volumes drying up, stock exchange managements are at their wits end to meet administrative costs.
But advocates for rolling systems also abound. "Globally most of the exchanges have gone into the rolling settlement mode. It is only now that India is looking at this," a broker said.
Several brokers of the Bombay Stock Exchange have put their membership tickets on the block. But there are no buyers for broking cards as the outlook for the broking businesses is perceived to be discouraging.
The value of the BSE membership ticket is now placed at around Rs 60 lakh against the high of Rs 3 crore in early 2000.
On the National Stock Exchange, the scenario is maybe worse as scores of brokers have queued up to surrender their membership rights.
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Infosys, Satyam hog major volumes on bourses
Mumbai-- Infosys Technologies and Satyam Computer created a history of sorts today by hogging a hefty 45.38 per cent of the total volumes on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Together, the two stocks aggregated a combined turnover of Rs 894.22 crore against a total volume of Rs 1970.50 crore on the BSE and NSE. Infosys Technologies after reporting Q1 earnings in line with expectations saw a buying spree on the BSE and NSE and aggregated volumes of Rs 641.32 crore, accounting for 32.55 per cent of the total traded volumes. Infy saw 94,147 trades for 17.61 lakh shares on both these exchanges. Today's volume in Infy accounted for 2.66 per cent of the total equity capital of the company.
Infy opened on a weak note at Rs 3480 and soared to high of Rs 3849 before closing to Rs 3767.40- gaining Rs 272.55 or 7.80 per cent over the previous close.
Satyam Computer, which also beat market expectations on Q1 results also saw a lot of buying. The stock aggregated the total volume of Rs 252.90 crore (accounting for 12.83 per cent of the total volume) on BSE and NSE. Satyam witnessed 86,111 trades for 149.73 lakh shares accounting for 5.32 per cent of the total equity capital of the company.
The volume of trading in top two stocks on BSE and NSE accounted for 19.2 per cent of the total on the first day of rolling regime. The volume perked up on the subsequent days from 25 per cent on July 4 to 35 percent on July 6. The volume aggregated around 32 per cent of the total on July 9 and 10.
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UTI changes practice, not to offer fixed return schemes
Mumbai –The Unit Trust of India has launched an open-ended, variable-return, pure debt monthly income scheme in a change of practice.
The scheme will compete with other unassured return monthly income plans like SBI MF, Templeton and Alliance Capital.
UTI’s MIPs are usually five-year closed-end schemes assuring a fixed return for the first year and a variable one thereafter.
According to market circles, these MIPs have created a huge contingent liability for the trust, with the aggregate negative reserves under the 18 MIPs exceeding the assets of the Development Reserve Fund.
The Fund guarantees payment of returns and capital to the investors of these schemes. Thanks to this, Sebi has gone slow in according permission to UTI to float a similar assured return MIP 2001.
While UTI filed its offer document with Sebi to launch the scheme nearly three months ago, it is yet to receive permission.
The scheme was scheduled to be launched in April 2001.
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Austerity drive at UTI
Mumbai—KG Vassal, Unit Trust of India’s acting chairman, plans to kick off an austerity drive at the mutual fund giant to conserve resources, and provide better returns to the investors.
He has also warned UTI employees against leaking information to outsiders in this hour of crisis, which is significant against the backdrop of the finance ministry's probe into suspected insider trading in UTI.
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PIL on US-64: UTI to file reply
Mumbai--The Mumbai High Court has directed UTI to file an affidavit by August 1 in reply to a public interest litigation challenging its recent decision to suspend sale and repurchase of units under the US-64 scheme. The PIL, filed by the National Association of Small Investors (Nasi), wants that the suspension of sale and repurchase of units be lifted and UTI be directed to repurchase the units at the same price offered to investors. The PIL also wants UTI to be directed to raise the dividend announced for the US-64 scheme to at least 20 per cent.
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