K-10 shares were a hit with UTI too

K-10 shares were a hit with UTI too

NEW DELHI: The nexus between Unit Trust of India and Ketan Parekh is quite apparent if one has to look at UTI’s exposure to K-10 shares. The Trust’s exposure in scrips of seven high profile new economy companies including Himachal Futuristic, Global Telesystems, Satyam Computers and Zee Telefilms stood at around Rs 1,800 crore as on February 28 this year.

The finance ministry has reportedly asked the market regulator Sebi to enquire whether UTI had indulged in insider trading, if any, in collusion with Parekh. Data from UTI shows that the value of UTI’s investments in HFCL, Global Tele, Satyam and Zee alone stood at over Rs 1,600 crore while the balance amount of less than Rs 200 crore was in DSQ Software, Pentamedia and SSI (Software Solutions). UTI’s holding in Himachal Futuristic Communication Ltd (HFCL), was over 11 per cent of the company’s equity capital base of Rs 78.82 crore. These investments were made through various mutual fund schemes including Monthly Income Plans (MIP) and US-64. The market value of UTI’s investment in HFCL as on February 28, 2001 stood at around Rs 617 crore, when the stock was trading around 670. The current market price of HFCL share is around Rs 136.

Similarly, UTI’s exposure, through all its schemes put together, in Global Telesystems stood at around 7.8 per cent of the company’s equity base as on February 28, withaggregate value of investments standing at Rs 138 crore on the market price of Rs 404 per share. The current market price is around Rs 154.

In Zee, UTI held over three per cent stake in the company’s equity of around Rs 42 crore. The market value of its investments in Zee as on February 28 stood around Rs 215 crore when the market price was Rs 171 against the current price of Rs 130. The aggregate value of UTI’s investments in these seven companies stood at Rs 3,200 crore as on January 31 and came down drastically to Rs 1,800 crore on February 28.

Assuming that UTI has not liquidated large number of shares in these companies during March, the current market value of its corpus would be around Rs 1,100 crore.

UTI held merely around 1.7 per cent of SSI Ltd’s (Software Solutions) equity but the market value, on the price of Rs 1,272 as on February 28, of the stake stood around Rs 140 crore. SSI’s share price has almost halved to Rs 643 since then.