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UTI
plans to merge its schemes
Our Banking Bureau
19 November 2001
 Mumbai:
The
merger and acquisition bug has also bitten the Unit Trust of India
(UTI), India’s largest mutual fund. Fed up with the large number
of schemes that it runs, said to be 87 in all as of now, it has
devised a novel method of bringing down the number - by merging
two or more of its schemes with each other. Running so many
individual schemes leads to confusion in investors’ minds, UTI
feels.
To begin with it has identified Mastergain 92 and Masterplus 91,
which it plans to merge with each other. Both Mastergain and
Masterplus are equity-based, growth-oriented, open-ended schemes.
While Mastergain was started in 1992, Masterplus was initiated one
year earlier. Both the schemes employ similar investment
strategies (that of making investments in shares), and UTI feels
that merging the two would serve investors better. This will also
help UTI to reduce the number of schemes it currently runs.
UTI is
also looking at unlocking value that currently remains tied up in
its investments made in unlisted shares. UTI’s policy of making
investments in unlisted companies via private placements was found
to be against investor interest by the Tarapore panel. It has
already identified 30 to 35 such cases and to begin with it has
identified Sicom, in which it has a 40-per cent stake. Sicom is a
Maharashtra-based development bank. UTI is on the  lookout
for a party, which would buy its stake in Sicom.
In other cases, UTI has begun giving feelers to promoters of the
companies concerned for buying back their shares. It would be
indulging in benchmarking for arriving at the value of its
investments. In case companies do not show any interest, UTI would
approach other companies, Indian or multinationals, to sell of its
investments.
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