US-64 has over Rs 500cr in dud stocks

Jai Kumar N R

New Delhi, Jan 1: The US-64 has investments of over Rs 500 crore in illiquid stocks, constituting around 3.66 per cent of its total Rs 13,646.96 crore investment corpus. The scheme’s provisional portfolio as on December 28, 01, shows that several of these stocks are not actively traded on the bourses.

The US-64’s exposure to each stock, which is not actively traded, ranges from 0.2-0.01 per cent of the total assets. Although these are small holdings considering the huge size of the corpus, they are in large numbers. Such stocks constitute a little under 200 and some of these investments are in sectors like steel, textiles, fertiliser, auto ancilliaries, paper and technology.

Some of these illiquid counters include the scam-tainted Cyber Space Info with an investment worth Rs 10.67 crore, SKumars Nationwide (Rs 13.68 crore), Shri Rama Multi Tech (Rs 12.14 crore), Gujarat Narmada Valley Fertilisers (Rs 12.01 crore), Vysya Bank (Rs 17.46 crore), Infotech Enterprises (Rs 2.26 crore), Shonkh Tech (Rs 2.13 crore), Deepak Fertilisers & Petrochem (Rs 9.66 crore), Surat Textile Mills (Rs 5.55 crore), Maars Software International (Rs 5.61 crore), Malwa Cotton Spinning (Rs 5.23 crore), Mahavir Spinning Mills (Rs 5.46 crore), Dewan Housing Finance Corp (Rs 3.43 crore), Eskay K’nit India (Rs 2.83 crore), Pennar Industries (Rs 2.75 crore), Samtel Colour (Rs 2.6 crore), and Welspun Syntex (Rs 2.03 crore) among others.

Also, the bedevilled scheme has investments worth Rs 326.1 crore in the K-10 stocks. These stocks include Satyam Computers with an exposure of Rs 132.2 crore, Zee Telefilms (Rs 71.33 crore), Himachal Futuristics (Rs 35.36 crore), Digital Equipment (Rs 34.12 crore), Global Telesystems (Rs 23.84 crore), SSI (Rs 11.91 crore), Aftek Infosys (Rs 8.1 crore), DSQ Software (Rs 6.28 crore), and Silverline Tech (Rs 2.95 crore).

Total equity investment of the scheme is a whopping Rs 8,562.76 crore, which is 61.81 per cent of the total assets and the balance in non-convertible debentures, preferential shares, term loans and other form of debts.

The scheme holds fixed assets worth Rs 192.73 crore. However, the equity investment is heavily concentrated in six stocks - Reliance Industries, Reliance Petroleum, ITC, Infosys Tech, Hindustan Lever and HDFC. Of this, the two Reliance group companies together account for 18.56 per cent of the total corpus. These six stocks account for 31.27 per cent of the total assets.

According to analysts, this imbalance in equity investments raises concern. Value Research CEO Dhirendra Kumar says, “the top 10 equity holdings account for 37 per cent of the total investments and top five at 29 per cent. This heavy concentration is a discomforting factor, especially when the Reliance group companies account for over 18 per cent of the total investments.”

The scheme has investments worth Rs 4,268.84 crore in the above six stocks, according to the latest portfolio of the scheme.