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UTI dumped side counters last year

Samata Dhawade

The Unit Trust of India was an aggressive seller in the side counters all through 2000-01 (July-June) but was holding on to frontline stocks like a possessive spouse, published data show.

The investment pattern of 61 equity-oriented schemes (excluding US-64) of the trust between June 2000 and June 2001 reveals profit booking through heavy unloading of second-rung stocks -- some of which were ruling high.

The 61 schemes taken for this study had invested a total Rs 173.37 billion in equities in June 30, 2000. This declined to Rs 161.88 billion in December 2000 and to Rs 111.76 billion by June 30, 2001.

These schemes hold scrips of a total of 683 companies. Of this, the market value of the top 100 scrips tantamount to 94.5 per cent of the corpus as on June 2001. This is up from 92.2 per cent in June 2000, indicating higher concentration.

The data shows that the fund's holding in top 10 frontline stocks remained almost constant after February 2001. The fund had partially booked profits in these counters between June 2000 and February 2001. In Infosys Technologies, UTI cut its holdings by 362,000 shares in the past one year. The counter has slipped from Rs 8,000 levels to around Rs 3,700 currently.

But the trust has maintained its holdings in Infosys, apart from Larsen & Toubro, Nestle, MTNL, and Punjab Tractors at nearly the same levels as on March 31, 2001. Interestingly, UTI reduced its Reliance Industries stock by almost one-third during the year, cutting exposure by 1.33 million shares in the last three months to 3.43 million shares now.

Due to this sustained selling, the Reliance counter has dropped 20 per cent in the last three months. But the trust has cranked up its Reliance Petroleum holding, especially during the last quarter of the year, adding 5.7 million shares to its holding of 4.03 million shares as on June 30, 2000.

In sharp contrast, the fund reduced its exposure in 155 side counters and made an exit from 138 side counters between July-June 2001. Among the infotech counters, the fund cut its stake sharply in VisualSoft Technologies, SSI, Rolta India and DSQ Software.

In VisualSoft, for instance, UTI pared investment by 165,000 shares to 211,000 shares. In Rolta India, it cut holding from 225,000 shares to 71,000 shares, and in DSQ Software, from 523,000 shares to 729,000 shares. In fact, UTI cut its holdings in steel companies through the year taking advantage of the resurgence in sectoral scrips.

It dumped Essar Steel -- it had 1.19 million shares in July 2000 and as of June 30, 2001, held 1.6 million shares. In Ispat Industries, UTI reduced its holding by 75,000 shares to the current level of 605,000 shares.

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