The sharp erosion in assets also indicates at the increasing burden on the government to honour the short-fall between net asset value (NAV) and the guaranteed price which will touch Rs 12 in May 2003.
The assets under the management of US 64 has fallen from around Rs 12,986 crore as on March 31, 2002 to Rs 10,732 crore as on September 30, 2002. The plunge in the schemes corpus seems to be mainly due to the dive in equity prices. The broader BSE Sensex has plunged by almost 14 per cent during the first-half of the current fiscal and the selling was across-the-board.
Besides, the redemption to the tune of Rs 603.84 crore during the six-month period and the full provision made for non-performing assets (NPAs) have also contributed to the fall in the corpus during the half-year period.
The equity portion of the US 64 portfolio has seen a massive fall of almost Rs 2,295 crore during the half-year period from Rs 8,756.74 crore as on March 31, 2002 to Rs 6,461.8 crore as on September 30, 2002.
This also means that the equity exposure of the scheme has come down from 67.43 per cent to 60.21 per cent. The high equity exposure has also proved to be a bane for the balanced fund.
Besides the plunge in the value of the equity holdings, the fall in equity exposure has also been due to UTI resorting into aggressive selling in its top holdings like Reliance Industries, ITC, Reliance Petroleum, Infosys Techno-logies, Hindustan Lever, ICICI Bank, BPCL, Nalco, L&T, MTNL and Satyam Computers during the half-year period.
The equity exposure to Reliance Industries has fallen from 11.1 per cent as on March 31 to 9.24 per cent as on September 30, 2002, BPCL from 2.57 per cent to 1.53 per cent, Hindustan Lever 2.46 per cent to 2.25 per cent.
The prices of major equity holdings of the scheme like Reliance Industries (fall of 14.18 per cent), ITC (7.82 per cent), Reliance Petroleum (12.66 per cent), Infosys Technologies (4.4 per cent), Hindustan Lever (23.82 per cent) and BPCL (49.14 per cent) have fallen sharply during the six-month period. This had a bearing on the corpus of the scheme.