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UTI Equity funds lose Rs 792 crores

The 29 open and closed-end equity funds of UTI have lost assets worth Rs 792 crore in the ICE avalanche, which rocked the bourses after the budget. The cumulative tech exposure of these funds has fallen by 41% between December 29, 2000 and March 19.

The carnage on the bourses has not only impacted UTI flagship, US-64. The 29 open and closed-end equity funds of Unit Trust of India have lost assets worth Rs 792 crore in the ICE avalanche, which has rocked the bourses after the budget. The cumulative tech exposure of these funds has seen a monumental fall of 41% from Rs 1953 crore on December 29, 2000 to Rs 1161 crore on March 19.

For an idea of the impact of recent volatility, consider this. The UTI funds' exposure to HFCL has dropped like nine pins from Rs 285 crore in December 2000 to mere Rs 44.84 crore on March 19! The March figure is based on the assumption that there has been no change in the holdings since February 28.

The February portfolio of the equity funds reveals an aggregate investment of Rs 1485 crore in technology stocks, which is 21% of the combined corpus of Rs 7200 crore on February 28, 2001. As many as 27 funds, excluding UTI Pharma and UTI Petro, have invested in the volatile sector and interestingly, hold a total of Rs 670 crore in the (in) famous K-10 stocks. Barring Ranbaxy laboratories, all these stocks belong to the technology sector.

However, besides UTI Software, only a couple of open-end equity funds - Grandmaster and Services Sector - are overweight on the ICE sector. The duo have a technology exposure of 44% and 48%, respectively. No wonder, both the funds have lost heavily in the tech-melee during the last one-year.

On the other hand, UTI's closed-end funds strategically have a larger exposure to technology stocks since they can afford to take a long-term view on the sector with redemption still a few years away. The AMC's closed-end tax saving funds, with their ten-year tenure, are among the bullish lot with an average exposure of 32%. Little surprise then, these funds have seen their net asset value erode by an average 33% for the one-year ended February 28, 2001. The open-end tax plan, UTI Equity Tax Saving Plan, however, has limited its technology exposure to under 23%.

The ICE exposure is largely concentrated across frontline technology stocks like Infosys, Satyam, NIIT, MTNL, Zee Telefilms, Himachal Futuristic and Global Tele-system. For instance, the combined holding in Infosys is still a whopping 423 crore, though it has receded from its December level of Rs 491 crore. In fact, the fall is sharper post-budget since Infosys had a total investment of Rs 598 crore on the budget day. On the other hand, Satyam Computers and MTNL today account for a total investment of Rs 170 crore and Rs 164 crore, respectively. The troika, thus, has a whopping weight of 65% in the total technology exposure. Unit Trust of India's flagship, US-64 also holds a substantial stake in Infosys, Satyam Computers and MTNL.

Among unlisted stocks, as many as 17 funds have picked up a stake in telecom player, Global Electronic Commerce Services with a cumulative investment of Rs 32.96 crore. A few closed-end master equity plans and UTI Services Sector fund have a marginal holding in Galaxy Entertainment and portal, Indya.Com.