Corporate India backs US-64

MUMBAI, September 15: In another development, Abhey Oswal, chairman of Oswal Agro Mills, said that he planned to park Rs 50 crore in US-6...

MUMBAI, September 15: In another development, Abhey Oswal, chairman of Oswal Agro Mills, said that he planned to park Rs 50 crore in US-64. Of this, Rs 15.5 crore was invested on Thursday and another Rs 35 crore will be pumped in on Friday.

At a hurriedly organised press conference here, Ficci president K K Modi blamed the current crisis faced by the the country8217;s leading financial institution on financial ingenuity8217; of certain fund managers. Modi felt quot;a lot of people are working in concertquot; to weaken UTI and the market as the government was planning a major disinvestment exercise of the public sector units.

He said that a discreet survey conducted by the chamber revealed that many large corporates, which are major investors in US-64, are not considering withdrawing their investments from the scheme.

Modi added companies such as ITC, Bombay Dyeing, Indian Rayon, Grasim, Max India, Arvind Mills, Hindalco, Tata Sons, SRF and Geotze India are among companies which continue to support UTI. Additionally,certain Ficci members have also stated that they will not seek redemption of their exposure in UTI.

In a symbolic gesture, Modi announced that his company would invest an additional sum of Rs 5 crore in the UTI. He hoped other corporate houses would follow suit and that the quot;UTI would soon be cleared from the maneouvering of vested interests like hyper speculatorsquot;.

On Oswal investment in US-64, Abhay Oswal told The Financial Express that US-64 is the best investment amongst all instruments of its type now available in the country.

Talking enthusiastically about his investment, Oswal said that quot;this is the time for the Indian corporate sector to stand by the average investor and fight the vested interests at play in the capital marketquot;. He went on to add,quot;We have to fight the very forces that have brought the formidable economies of South Korea, Malayasia and Thailand to the brinkquot;.

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He was emboldened by the fact that the annualised return given by the US-64 scheme is between 18.3 and 19.4 per cent, asan investment of Rs 14.55 per Unit in October will elicit a dividend of Rs 2 in the first week of July next year. What may come as a bonanza is that fact that the UTI contemplates an appreciation in the Unit price to Rs 14.90 8211; Rs 15, which is roughly 1.4 to 3 per cent higher than the acquisition price of Rs 14.55.

The return on US-64, therefore, is far superior than other AAA8217; investments, which can fetch a maximum return of only around 13.50 to 14.25 per cent per annum.