UTI trying to avert liquidity woes
Mumbai—The Unit Trust of India (UTI) has reportedly entered into block deals with financial institutions, including Life Insurance Corporation of India (LIC) to create liquidity for meeting possible redemption pressure in its Unit Scheme-1964 (US-64) from August 1. Former UTI chairman PS Subramanyam had suspended both sale and repurchase of US-64 units on July 2.
Among FIs, LIC is said to be on the top of UTI’s list to meet liquidity due to redemption from small investors of US-64. LIC officials say no such block deals have taken place.
UTI’s new chairman, M Damodaran had said that UTI has already arranged line of credit with banks (both state-owned and private sector) and with financial institutions. However, while the line of credit could be utilized against pledging of government securities and triple ‘A’ rated corporate paper, UTI has to sell its equity holding in various companies to raise money. At this stage, the FIs are the best bet.

Under the US-64 scheme, there are around 1.85 crore unit holding accounts with up to 3,000 units totalling to around Rs 5,926.13 crore (at face value) as on June 30. Thus, the redemption pressure is expected to be of around Rs 6,000 crore, if all these unitholders go to UTI for redemption from Aug 1.
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Early markets down
Mumbai—The stockmarkets were down in early deals on account of losses in index heavyweights Reliance, HLL and Bhel.
Zee Telefilms was up 6.67 per cent on news that Subhash Chandra was seeking to dilute the equity of Zee Telefilms to raise funds. The move makes Zee's bid to invite a strategic partner more attractive. Higher costs are likely to pull down the company's quarterly profits by 20-30 per cent.
Gujarat Ambuja was up 2.80 per cent, while Grasim gained 3 per cent. Both companies will announce results later in the day.
Index heavyweight Reliance whose results are expected today as well was 1.69 down per cent at Rs 308.0.
Computer education and software services company Aptech was down 4 per cent after it announced a 94 per cent decline in April-June net profit compared to a year ago. Education major NIIT was down 3.15 per cent on news of slow down in profit growth.
India's largest beer company United Breweries, which reported a 65 percent fall in its April-June net profit was down 4.80 per cent. In pharma stocks, Dr Reddy saw a spurt of 4.47 per cent (Rs 71.45) to Rs 1,671. Ranbaxy was slightly higher but Glaxo and Cipla were down on profit booking. Cement pivotals also registered gains.
MTNL, M&M, Reliance, SBI, BHEL, Bajaj Auto, HLL and HPCL were on the losers' list.
The Sensex opened with a positive gap of four points at 3,255.92. After briefly dipping to a low of 3,249.46, the index moved to higher levels and held on to the gains through the remaining session. Touching a high of 3,289.01 towards the close, the index finally ended the day with a gain of 34.36 points at 3,285.89.
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