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UTI to return Rs 3,000 crore
Anindita Dey & Janaki Krishnan in Mumbai | January 19, 2005 09:02 IST
The Specified Undertaking of the Unit Trust of India or UTI-I will be returning close to Rs 3,000 crore (Rs 30 billion) to the government in the next two months.
UTI-I had received this amount as part of a bailout package from the Union government.
Of the Rs 3,000 crore, UTI-I will be repaying around Rs 1,900 crore (Rs 19 billion) from the Special Unit Scheme - 99 and another Rs 1,000 crore (Rs 10 billion) from US-64. "This will be done in the next one to two months," UTI Mutual Fund executive director DSR Murthy Business Standard.
Last year, UTI-I had repaid Rs 3,500 crore (Rs 35 billion) from the SUS against the government's initial investment of Rs 3,300 crore (Rs 33 billion) in the scheme.
The SUS-99 was launched in 1999 with the intention of taking some of the burden off US-64, which was going through a particularly rough patch.
The government was the sole subscriber to the units. The bulk of the public sector holdings of US-64 was transferred to this scheme. At that time, most of these stocks were neither attractive nor frequently traded.
After the debacle of the US-64 in 2001, the government did not actually pump in any money but offered investors 6.5 per cent tax-free bonds.
However surpluses generated from the sales of the holdings under the scheme are being given back to the government, which is the major shareholder.
This comes in the wake of the fact that the schemes under UTI-I have done extremely well in the last year.
With the equity markets touching new highs in the last few months, the net asset value of the most of the schemes under UTI-I are trading at highs.