UTI Mutual Fund is in the final stages of transferring the IL&FS mutual fund schemes to itself. The price it will pay will be between Rs 30 crore (Rs 300 million) and Rs 40 crore (Rs 400 million). The effective date for the transfer of the IL&FS mutual fund's schemes has been set as July 5, 2004. 
 
N K Sharma, president and CEO of IL&FS mutual fund, confirmed the date of transfer. The value of the schemes will be as per their value on Tuesday. 
 
Sharma refused to comment on the valuation figure, saying that PriceWaterhouseCoopers, the auditors appointed by UTI mutual fund, are still working on it and it would take two to three days to get the final picture. 
 
Sources, however, said the valuation figure would be between 1.5 per cent and 2 per cent of the total assets of IL&FS mutual fund. On May 31, 2004, IL&FS Mutual Fund had assets under management of Rs 1760.75 crore (Rs 17.61 billion), according to data provided by the Association of Mutual Funds of India. In the current month, its assets had gone up to around Rs 2,000 crore (Rs 20 billion), sources said. This puts the acquisition cost at between Rs 30 crore and Rs 40 crore. 
 
Incidentally, this is the lowest valuation for a mutual fund acquisition in India. Previous acquisitions have been valued upwards of 4 per cent of the assets acquired. Internationally, the benchmark is between 2 and 3 per cent. 
 
On February 5, UTI mutual fund entered into a memorandum of understanding with IL&FS mutual fund to acquire its schemes. The latter manages 10 schemes. UTI mutual fund's assets on May 31, 2004 were Rs 19,000-plus crore (Rs 190 billion). UTI mutual fund has 41 schemes in India, it also manages four offshore schemes. 
 
On May 29, UTI mutual fund received formal Securities and Exchange Board of India approval for the acquisition. After the merger, UTI mutual fund is planning to retain the original identity of the acquired schemes since some of IL&FS mutual fund's schemes will add value to UTI mutual fund. 
 
Among these are IL&FS floating rate fund, IL&FS Dynamic Equity Fund and IL&FS Global India fund. These schemes will retain their original character without any changes, along with IL&FS Bond Fund, which is managed more aggressively than UTI Bond Fund. 
 
UTI mutual fund has also offered to retain some of the personnel in IL&FS mutual fund.