PUNE, Nov 30: Prudential ICICI Asset Management company has received SEBI approval for rolling over and restructuring ICICI Premier, the close ended fund, for further five years up to February 2004. The fund which has a corpus of around Rs 110 crore was due for redemption in February 1999.Trading in the old units of the scheme was suspended in early November 1998 and from November 25 onwards the company has started sending unit holders option letter to convey their decision to either roll over their current holding or to redeem the same. If the scheme does not receive unit-holders' affirmative response prior to December 31, then the scheme will be required to redeem the holding of the units. This option is only for existing holders.For successfully rolling over the fund it will have to receive at least Rs 30 crore. Pankaj Razdan, head (west zone) of Prudential ICICI stated that they were hoping that bulk of the investors will opt for rolling over.Razdan stated that the equity fund will be recast into a balanced fund with a minimum 60 per cent of the corpus invested in debt and money market securities and the remaining 40 per cent in equity of MNCs.According to Razdan the decision to invest exclusively in the MNC stock is based on their study on the performance of the MNC companies, which showed a 15 per cent annualized return in the last five years. The market during the same period gave a negative return of 0.80 per cent. The proposed debt component would provide steady returns to the portfolio and ensure that the capital is preserved. Razdan said that "Even if the entire equity portfolio invested is reduced to zero over five years a 10.78 per cent annualized return on the debt securities could safeguard the the unit value of Rs 10".The ICICI Premier fund had a NAV of Rs 6.48 as on Feb 24, 1998 when it was taken up for restructuring. The number of stocks held were reduced and investment was focussed on key industries and stocks as part of the restructuring process. As on July 31, 1998 ICICI Premier NAV was Rs 7.49. The company will be focussing on attracting investors in 14 cities in India where more than 80 per cent of the investors are located. Most of these cities are situated in the western region.
