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41 UTI schemes have Rs 116.55 billion negative reserves

B G Shirsat

Forty one of the Unit Trust of India's schemes, including its flagship US-64, and 17 assured return monthly income plans, had negative reserves of Rs 116.55 billion on December 31, 2001. The aggregate unit capital of the 41 schemes was Rs 440.91 billion on December 31 while the net asset value stood at Rs 324.36 billion.

UTI's financial year ends on June 30, 2002. The schemes had comfortable reserves of Rs 26.79 billion in December, 2000. Taking into account the current depreciation in the 41 schemes along with the negative reserves and surplus of Rs 116.55 billion, the total depreciation in these schemes is Rs 143.34 billion.

Since most of these schemes are net asset value linked, UTI is under no compulsion to bridge the entire gap. However, it will be required to infuse Rs 34.07 billion to bridge the gap in the 17 assured return MIPs.

US-64 got linked to NAV on January 1. However, UTI will continue to offer an assured return till May 2003 when it repurchases US-64 units.

The negative reserves in the flagship scheme Unit-64 is Rs 49.66 billion, accounting for 42.6 per cent of the total depreciation. If the positive reserves of Rs 31.36 billion in December 31, 2000, are taken into account, the decline in reserves is a staggering Rs 81 billion. The net asset value of US-64 on December 31, 2001, was Rs 78 billion compared to the unit capital value of Rs 127.66 billion.

The Children's Gift Growth Fund 1986 had negative reserves of Rs 19 billion. The scheme had negative reserves of Rs 7.09 billion in December 2000.

The monthly income plans which provide an assured income to its holders have put a big hole in UTI's reserves. The 17 MIP schemes had negative reserves of Rs 34.07 billion in December 31, 2001, up from negative reserves of Rs 1.86 billion in December 31, 2000.

The MIPs 1997 had negative reserves of Rs 12.78 billion and MIPs 1998 of Rs 10.84 billion. The MIPs launched in 2000 had negative reserves of Rs 5.87 billion.

The value of the portfolio of the master equity plan (MEP), floated between 1993 and 1997, depreciated massively as their reserves declined from Rs 1.61 billion to minus Rs 14.4 billion.

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