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Journalism of Courage
Though the most high-profile of UTI8217;s losses, from the investor point of view, it8217;s the least problematic8212;now that they8217;ve all got used to the fact that they8217;ve had to take a big hit on its price, Rs 14 at the time repurchases were suspended last year.
The government promised to support small investors, and allowed them to exit the scheme at the par value of Rs 10, provided they owned less than 5,000 units. But, for every month they held on, they were given a bonus of 10 paise per unit8212;in effect, this translated into an assured annual return of 12 per cent, which was higher than that offered by other safe investments. For those who owned above 5,000 units, the government guaranteed a price of Rs 10 by May 31, 2003.
Sales in January 2002, the first month for NAV-based trading, stood at Rs 56.13 crore but in later months purchases of US-64 units dropped sharply at Rs 9.32 crore, Rs 4.07 crore and Rs 7.35 crore in February, March and April respectively. The repurchases, at NAV prices, in January were Rs 8.36 crore and grew in later months at Rs 9.94 crore, Rs 16.81 crore and Rs 15.90 crore in February, March and April, respectively. The repurchases, under special window, has shown declining trend with January figures quoting at peak of Rs 180.98 crore and dropping to Rs 56.39 crore for April.
