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UTI not to split US-64; to offer investors safe exit routes

Ruling out any split in US-64, Unit Trust of India said it is likely to offer its 20 million investors several safe exit options when the flagship scheme opens for sale and repurchase (by January 2002).

"We are considering 3-4 options. One of the options is to allow investors to migrate into other schemes from US-64," UTI chairman, M Damodaran, said in New Delhi.

The country's biggest mutual fund may also simplify its existing schemes in order to ensure higher return to investors, he said.

"We are waiting for the Malegam Committee Report before finalising the options," the UTI chief said.

Damodaran refuted market rumours that US-64 would be split into equity and debt funds before pricing it on the basis of net asset value sometime in January 2002.

"It (US-64) can't be split as it would create more problems for the small investors," he said.

Analysts expects that the flagship scheme's NAV was likely to be lower than Rs 10 a unit due to the fund's heavy exposure in equity, which witnessed severe erosion in value due to various internal and external factors.

Damodaran also said that the UTI, as a whole, would not be split into separate entities.

The top management recently decided to empower three executive directors with investment decision making and this will keep the chairman out of the process, he added.

Damodaran, who took charge of the fund in late July, said the situation with UTI was better now while asserting that investors should not exit the fund at this point of time.

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