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UTI real estate holdings may go into reserve fund

Our Bureau

MUMBAI, Sept. 6

THE Unit Trust of India (UTI) is likely to transfer its real estate holdings aggregating over Rs 800 crore to the trust's development reserve fund (DRF). The move is a precursor to bringing the Unit Scheme-1964 (US-64), UTI's largest scheme, to make it l inked to the net asset value (NAV).

The UTI Chairman, Mr M.R. Damodaran, briefing the investors' association led by the BJP MP, Mr Kirit Somaiya, here on Thursday, said that the trust is planning to shift its real estate holdings, in the form of various offices and residential premises cur rently held by US-64, to the DRF. ``This is to enable the scheme to be linked to NAV,'' he said. He did not specify the time-frame for completing the formalities pertaining to transfer of real estate holdings to the DRF.

UTI sources said that the trust's DRF is currently estimated at over Rs 1,500 crore. UTI has set a deadline of January 2002 to make US-64 NAV-driven.

The investors' associations, led by Mr Somaiya's Investors' Grievances Forum (IGF), made representation to UTI expressing investors' concern about UTI's various schemes and developments surrounding them.

The associations demanded that UTI should increase the upper limit on maximum number of units under US-64 for availing repurchase facility at fixed price. ``They demanded that the limit be raised to 5,000 units per applicant,'' UTI officials said.

UTI is unlikely to increase the limit on repurchase from 3,000 to 5,000 units as average application size for repurchase till date (from August 1, 2001) has been around 1,300 units. This indicates that those who genuinely faced difficulties had been tend ering units for repurchase.

Mr Somaiya also suggested that UTI should communicate more freely with investors so that the worries ``unnecessarily created'' by media reports are addressed. Mr Damodaran replied that UTI has been communicating with investors regularly through monthly b ulletin and its Web site.

Senior officials said that between August 1 (when UTI reopened repurchase window) and September 6, UTI has repurchased US-64 units worth over Rs 140 crore. ``For the whole of August, repurchases were of the order of about Rs 116 crore. During the first s ix days of September, the repurchases under US-64 work out to about Rs 24 crore,'' UTI officials said.