of India (UTI) is exploring possibilities to sell its holdings
in three leading Indian corporates: Larsen and Toubro, BSES
and Modi Rubber. The company has already sold its stake
in Reliance Industries Ltd (RIL) and is now looking at disposing
of its entire 11.8 per cent holding in ITC Ltd.
the development, a senior UTI officials says: "If UTI
is getting double the price than the current market price
we will sell our stake in L&T, BSES and Modi Rubber.
All depends on the prices."
UTI, the largest mutual fund in India, has already sought
the governments approval to divest its holdings in these
Says a UTI official: "There is nothing unusual about
it. Last month, three of our schemes MIP 97, Institutional
Investors Special Scheme and MIP 95 matured. Once the
schemes get matured, we can sell our holdings. From the
sale of Reliance stocks alone we have made a profit of over
Rs 970 crore. Besides, as per the new regulations of the
Securities and Exchange Board of India, UTI cannot keep
more than 10-per cent stake holding of any corporate."
In each of these companies, UTIs holding is between 10
and 15 per cent. In L&T, UTI has 9.5-per cent stake,
while in Modi Rubber it has a holding of more than 14 per
cent. In RIL, UTI had around 10-per cent stake.
Over the course of fiscal 2001-02, UTI has sold large stakes
it once held in some of Indias blue-chip concerns. Apart
from RIL, UTI has sold major chunks in Hindustan Lever,
ITC and Infosys during fiscal 2001-02, reducing its shareholding
in these companies by almost half.
UTI has sold almost 3 crore shares of HLL in the 2001-02
period, netting between Rs 650 crore and 750 crore. It has,
however, bought around 4 lakh shares in the last two months.
Over the past fiscal, the price of HLL touched a low of
Rs 181 in September 2001 and a high of Rs 266 in March 2002.
The shareholding of UTI in the company has fallen from almost
4.2 per cent in March 2001 to just 2.8 per cent in March
In Infosys, it has sold off more than 22 lakh shares in
the year ending March 2002 with hardly any purchases in
the last two months. Between 2001 and 2002, Infosys touched
a high of Rs 4,861 and a low of Rs 2,156.
at an average price of Rs 3,500, UTI must have netted
more than Rs 800 crore from the sale of Infosys shares
alone. This has led to UTIs shareholding in Infosys falling
from 8.38 per cent in March 2001 to 4.9 per cent in March
UTI has also sold off large blocks of shares in other
bluechips, such as ITC, State Bank of India, Tisco and
HDFC. In Tisco, too, the trust has sold off more than
78 lakh shares of the company in the 2001-02 period.