UTI restructures department of investments
Mumbai: As part of its restructuring exercise, the Unit Trust of India (UTI) has decided to scale down the operations of its department of investments and internal credit rating cell.

The department in its existing avatar is being done away with and its place a team of two to three officers is being formed. This team will ensure that investment proposals submitted to UTI comply with all procedural formalities and not just do a cursory due diligence.

Earlier, when executive director Basudeb Sen was with the fund, the department used to do a detailed due diligence exercise and come up with recommendations on primary market investment proposals, whether debt or equity. However, following Mr. Sens exit the department was reduced to processing of the investment proposals and requisitioning of an internal credit rating or a research report from the equity research cell.

As regards the internal credit cell, UTI has decided that it shall by and large not subscribe to any debt instrument that is not rated by any of the Sebi recognised credit rating agencies.

The greater frequency of the rating review exercise by the credit rating cell is expected to provide a more reasonable valuation for the securities held by UTI, which is expected to ensure that the announced net asset value is as close to realisable value as possible, said officials.
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