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UTI has sold over 20 lakh shares of ITC in one year

Sambit Saha

Unit Trust of India, which has been selling its holding in many blue chip companies, has sold over 20 lakh ITC shares in the last one year.

The country’s largest mutual fund sold 20,75,533 shares netting over Rs 140 crore (Rs 1.4 billion). UTI was on a selling spree to tide over redemption pressure in different monthly income plans before government came out with a Rs 14,000 crore (Rs 140 billion) in bailout package.

UTI held 314,61,116 shares of ITC as on September 30, 2001 which came down to 293,855,83 shares on September 30, 2002. As a consequence, UTI’s shareholding in the company, came down from 12.82 per cent to 11.87 per cent during the same period.

UTI has stated several times it was a seller in ITC and it felt sale was the way to unlock maximum value from its holding. However, sale of the total UTI holding could cause instability in the management control at ITC. Analysts tracking the company said that the sale of shares of is not related to the downturn of the tobacco industry.

“UTI has been on a selling spree to meet payment obligations of its various schemes and ITC being a high-valued stock was a natural choice for the Trust”, they said.

During the period, ITC share touched high of Rs 782.65 as on January 18, 2002, and low of Rs 572.25 May 23, 2002. On Monday, the stock closed at Rs 641.70 at the National Stock Exchange (NSE), up by 1.05 per cent from its previous close of Rs 635.

At Bombay Stock Exchange, the stock closed at Rs 644.35. The volumes at BSE and NSE were 81,430 and 91,306.

Over the last year, UTI has offloaded blocks in several blue-chip companies including Reliance, Infosys and a host of PSU stocks. In Infosys, UTI sold shares worth Rs 1000 crore (Rs 10 billion) between March 31, 2001, to June 30, 2002.

The shareholding pattern of ITC shows that combined holding of mutual fund and the UTI stood at 13.8 per cent on September 30, 2002, as compared to 14.02 per cent on September 30, 2001.

During the period, stake of banks, financial institution and insurance companies went up from 20.94 per cent to 23.36 per cent, foreign institutional investors went down from 12.01 per cent to 10.31 per cent.

Others, that include public as well as foreign companies stood at 52.53 per cent as on September 30, 2002 compared to 53.02 on September 30, 2001.

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