UTI sells 4% stake in ITC to LIC and New India Assurance

Mumbai:
16 April 2003

Industry sources say UTI is believed to have been net sellers in the index heavyweights like ITC, Reliance and Tisco during the last two months due to redemption pressures on its monthly income plans.

UTI's 1,99,62,137 number of ITC shares is believed to have been picked up by Life Insurance Corporation (LIC) and New India Assurance Company. LIC's stake in ITC has increased to 13.55 per cent as against 12.59 per cent during the quarter ended March 2003.

Source say UTI has faced redemption pressure of Rs 300 crore as two of its schemes, Monthly Income Plan (MIP 98), which has a total corpus of Rs 788 crore, and Master Equity Plan-93, which has a total corpus of Rs 135.56 crore, matured on 31 March 2003 and 1 April 2003, respectively.

Of the three other schemes, IISFUS-98, which has a total corpus of Rs 647.85 crore (of which 25 per cent or Rs 162 crore is equity-holding) will mature on 31 May 2003. The MIP-98(II), which has a total corpus of Rs 513.55 crore (of which 21.6 per cent or Rs 111 crore is equity-holding), and Master Value Fund, which has a total corpus of Rs 125 crore (of which 82.64 per cent or Rs 103.3 crore is equity-holding) will mature on 30 June 2003.

"As long as this redemption pressure from UTI looms large over the market, not much buying is expected. In fact, the market takes account of the fact that UTI has not yet started selling in a big way as yet," say market analysts.