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Rolling Heads do not Make a Livid Institution

The government must give a free hand to the new chairman to stem the rot. Further, make US-64 NAV-based and then set its house in order.

A. The returns from US '64 have simply slumped as dividend payout and repurchase prices have been on a steady decline in the last decade. The dividend yield for the current year works out to a paltry 7.40 per cent.

Dividend Yield for one year holding period
30-Jun-91 14.18
30-Jun-92 17.73
30-Jun-93 17.45
30-Jun-94 16.25
30-Jun-95 15.76
30-Jun-96 12.90
30-Jun-97 14.29
30-Jun-98 14.29
30-Jun-99 9.64
30-Jun-00 10.19
30-Jun-01 7.40*
* UTI has suspended sale and repurchase in US 64

B. The divdend income, after rising in the early part of 1990s has gone down since 1996. It finally hit a new low of 10 per cent this year as US '64 suffered heavy losses on its equity portfolio and came under redemption pressure

Pay-out History (%)
Jun-90 18.00
Jun-91 19.50
Jun-92 25.00
Jul-92 Pref. Offer @ 11.20
Jun-93 26.00
Jun-93 2:5 Rights @ 12.80
Jun-94 26.00
Sep-94 1:5 Rights @ 14.80
Jun-95 26.00
Jun-96 20.00
Jun-96 1:10 Bonus Issue
Jun-97 20.00
Jun-98 20.00
Jun-99 13.50
Jun-00 13.75
Jun-01 10.00

C. The unit capital of US-64 has been volatile, witnessing a huge jump in 1994 when the scheme's popularity was at its pinnacle. Since then, the fund has seen alternate bouts of inflows and outflows. The latest unit capital is the lowest since June, 1994.

Unit Capital (Rs. Cr)
Jun-90 7029.73
Jun-91 7268.66
Jun-92 6330.90
Jun-93 7410.20
Jun-94 12019.61
Jun-95 15281.73
Jun-96 13514.46
Jun-97 14028.15
Jun-98 15629.70
Jun-99 13544.19
Jun-00 15146.26
Jun-01 12778.00