The current situation of UTI repurchasing units at Rs 14.25 while the media reminds the investors every day that these units are worth only Rs 9 or Rs 10, would cause unabated redemption of US-64. To be sure, the finance minister's guarantee and the UTI chairman's assurance may give some comfort to panicky investors. But past performance and government guarantees are not sufficient for investors to hold on to their units today. The negative gap between the NAV and repurchase price should be filled immediately.

Luckily, UTI can do this now with the help of `hidden assets', I don't mean the real estate or brand name. The strategic holdings ofUTI are the real hidden asset of UTI. Another measure to boost the NAV is that the centre should introduce the law to buy back of shares by companies immediately.

UTI has substantial stake in scores of companies like Grasim, Indian Rayon, BSES, ACC, Tata Chemicals, Raymonds, Tisco, etc, where the existing promoter's stake is much below 50 per cent. It is a fact that UTI is not satisfied with the management functioning of many of these companies. Thousands of crores of rupees of extra income will accrue to UTI if they take the important decision of offering these holdings to the highest bidder. This would benefit millions of investors in the country, especially UTI investors. A few examples given below would makes the idea clear:

For example, Grasim's market price is around Rs 145 while its book value is about Rs 320. A bid of Rs 400 can easily be expected. Similarly BSES, Kesoram, Tisco are all quoting below book value. A company such as ACC, which has inherent strengths will easily attract a price ofaround Rs 3,000 compared to its current price of around Rs 900.

When more parties are interested the bid prices can go up much further. This would change the face of the Indian capital markets and the era of ridiculous undervaluation will come to an end. If some promoters lose the management control of their companies, it's purely accidental and their bad luck. For some others it is the punishment for their sins, mismanagement, inefficiency, cheating of investors, etc. Big money is waiting in the country for this kind of strategic buying and the real worth of these companies would come out.

Corporate researchers and institutional fund managers who have been monitoring the big corporates and industries are well aware, how the wealth and cash flow of many companies are abused. Promoters holding some minority stake in the companies thought no end to themselves. They never thought of consolidating the companies activities at any point of time. They went into any kind of diversification and expansions withoutproper vision and focus. A textile company wants to make cement, paper, sponge iron, sea water magnesia, shipping or the readers of this article may suggest something and they will go for it tomorrow. An unquenchable urge to destroy wealth! The investors in this country are paying a heavy price for it directly and indirectly.

If required UTI should invite LIC and GIC to join this kind of an operation. If some one tries to consolidate or promise to manage better, sorry it's too late. No excuses. UTI has to take this hard decision right now, without any politics, for the benefit of millions of investors and for its own survival.

Where can such a huge amount of money come from?

At the first look, this is going to be the question in anybody's mind. But financial experts know the potential of concentrated big money that can flow into the system, once this kind of an opportunity is revealed.

Consider a situation where a company can buy back all the outstanding shares of it at the current market price withjust two years cash flow. It's real. There are hundreds of companies in this category. This shows the extent of undervaluation in the market right now. Buy back of shares is the right solution to bring back proper valuations in these companies and I am sure this would boost the NAV of all UTI schemes. This is the right time for the government to make an announcement to this effect.

The above two moves would take the NAV of US-64 above Rs 15 in one month's time, without any FII buying in the market. These are very practical and effective measures to solve the problem.