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LIC, GIC Mutual also in Cyberspace's Web

UTI is not alone. Sieving through the Value Research Institutional portfolio Database, we discovered other fund families, which owned the now (in)famous stock -- Cyberspace Infosys. The heady stock was found in the portfolios of LIC Mutual Fund, GIC Mutual Fund and Reliance Mutual Fund

UTI is not alone in bungling its investments in Cyberspace Infosys. Sieving through the Value Research Institutional Portfolio Database, we discovered that the cyber dream also turned sour for LIC Mutual and GIC asset management companies. Reliance Mutual Fund had also invested in the company's stock but for a brief period.

Earlier known as Century Finance, the non-banking finance company turned itself into a technology "czar" during the technology euphoria in early 2000. The stock touched a high of Rs 1374 in March 2000 only to sink to its last-traded price of Rs 5.75 on April 18, 2001 (after adjusting for the stock split). UTI top brass is already in jail, facing charges of "wrongful" loss for buying Cyberspace equity in a private placement deal of Rs 32.8 crore. The shares were placed with the fund behemoth at a price of Rs 930 per share in June 2000 when the average price for the month was around Rs 1100.

With the stock in an abyss, every fund that owns Cyberspace Infosys has no option but write-off this junk investment from their portfolio. The notable owners of the worthless stock include LIC Mutual, which stuffed nine of its portfolios with Cyberspace stock. The stock was present in an assortment of income and equity funds with a cumulative investment of Rs 7.06 crore. In fact, LIC MF's Dhan 80CCB(2) had to write off an investment of Rs 12,000 in the stock in March 2001.

On the other hand, GIC Mutual's equity fund - GIC Growth Plus II had an investment of Rs 2.28 crore in Cyberspace Infosys in March 2000. The stock was the one of the top holdings with a weight of 10.22% and seems to have been picked up when the price was near its peak in March 2000. In fact, GIC Growth Plus II is the worst hit since Cyberspace was its top holding as recently as January 2001 with an allocation of 9.38% at Rs 2.96 crore. Since the exposure has only gone up despite the dip in price, it means that the fund bought more at lower levels. We don't know if the fund still holds Cyberspace since it discloses only the top ten holdings.

Last but not the least, Reliance Vision of Reliance Mutual Fund had also invested in the company in March last year but seems to have sold it almost immediately. The fund owned an investment of Rs 2.50 crore in the stock, which accounted for 3% of the portfolio.

Cybercrazy Think Alike
    "Portfolio As on March 31, 2000"
Fund  % of Net Asset    Value (Rs.Cr)
Dhan 80CCB(2) 3.79 2.28
Dhanasahayog 3.40 0.57
Dhanavarsha (10) 1.50 0.57
Dhanavarsha (11) 1.14 0.34
Dhanavarsha (12) 0.41 0.57
Dhanavarsha (2) RO 1.50 0.57
Dhanavarsha (6) 1.43 0.34
Dhanavarsha (7) 1.65 0.34
Dhanraksha '89 1.09 1.25
GIC Growth Plus II 10.22 2.28
LICMF Tax Plan 5.52 0.23
Reliance Vision 3.18 2.50