Thanks to the rampant mis-management (mainly due the appointment of the political nominee as chairman of UTI ) in the erstwhile Unit Trust of India, the NAV of its flagship scheme US-64 dropped to app Rs.5.50 per unit against its administered price of Rs 14.00 per unit as on 30.06.2002 ( UTI was established under the act of Parliament & was not obliged to follow the guidelines / regulations framed by SEBI , resultantly there was no transparency in the working of UTI ).
At that time, to mitigate the sufferings of lacs of small investors, Govt. Of India intervened and created The Specified Undertaking of UTI (SUUTI) , with the mandate to pay off the investors of US-64 @ Rs.12.00 per unit up-to 5000 units per folio and holdings above 5000 units per folio were paid @ Rs.10.00 per unit.The underlying assets (securities bonds etc) of US-64 scheme were transferred to SUUTI.
The sensex ( BSE- INDEX) at that time was about 2800. At present the BSE- INDEX is around 28000. Thus SUUTI is now sitting on huge surplus. My humble submission to GOI is to distribute the surplus available with SUUTI to the erstwhile lacs of small investors of US-64.
From the budget speech (2015) , I gather that GOI is eyeing to utilize the assets of SUUTI to reduce the fiscal deficit during 2015-16. If this happens, it will be quite unfair and injustice to lacs of small investors , who had invested in the units of the savings organisation (UTI), which was created through the Act of Parliament. Most of the investors had put in their most of the life's savings considering it as a safe organisation being the Govt. body.
To be fair to all these small investors, the surplus available with SUUTI ( present value of assets of SUUTI (- ) minus the present value of amount paid by SUUTI to small investors in 2003.) may be distributed to the erstwhile unit holders.
At that time, to mitigate the sufferings of lacs of small investors, Govt. Of India intervened and created The Specified Undertaking of UTI (SUUTI) , with the mandate to pay off the investors of US-64 @ Rs.12.00 per unit up-to 5000 units per folio and holdings above 5000 units per folio were paid @ Rs.10.00 per unit.The underlying assets (securities bonds etc) of US-64 scheme were transferred to SUUTI.
The sensex ( BSE- INDEX) at that time was about 2800. At present the BSE- INDEX is around 28000. Thus SUUTI is now sitting on huge surplus. My humble submission to GOI is to distribute the surplus available with SUUTI to the erstwhile lacs of small investors of US-64.
From the budget speech (2015) , I gather that GOI is eyeing to utilize the assets of SUUTI to reduce the fiscal deficit during 2015-16. If this happens, it will be quite unfair and injustice to lacs of small investors , who had invested in the units of the savings organisation (UTI), which was created through the Act of Parliament. Most of the investors had put in their most of the life's savings considering it as a safe organisation being the Govt. body.
To be fair to all these small investors, the surplus available with SUUTI ( present value of assets of SUUTI (- ) minus the present value of amount paid by SUUTI to small investors in 2003.) may be distributed to the erstwhile unit holders.
12th Nov.2017,
Presently the Sensex (BSE-INDEX) is more than 33000, which means that the value of underlying assets of SUUTI would have risen by eleven times by now, even if we ignore the yearly dividends, which could have been utilized for the administration of SUUTI, and the asset value per unit can be safely presumed to be Rs 60.00 per unit.(5,50 * 11) Against this the present value of investment of the Govt. in 2003 per unit will be about Rs.43.70 ( Rs, 12.00 per unit paid in 2003with interest @9.00% compounding annually). As such SUUTI is presently sitting on the net surplus of about Rs.16.30 per unit.
Thus with all fairness to the small investors , who reposed their faith in the Govt. institution throughout from 1964 up-to 2002 & deposited their lifetime savings with UTI, the surplus available with SUUTI be distributed to the erstwhile unit holders.
Presently the Sensex (BSE-INDEX) is more than 33000, which means that the value of underlying assets of SUUTI would have risen by eleven times by now, even if we ignore the yearly dividends, which could have been utilized for the administration of SUUTI, and the asset value per unit can be safely presumed to be Rs 60.00 per unit.(5,50 * 11) Against this the present value of investment of the Govt. in 2003 per unit will be about Rs.43.70 ( Rs, 12.00 per unit paid in 2003with interest @9.00% compounding annually). As such SUUTI is presently sitting on the net surplus of about Rs.16.30 per unit.
Thus with all fairness to the small investors , who reposed their faith in the Govt. institution throughout from 1964 up-to 2002 & deposited their lifetime savings with UTI, the surplus available with SUUTI be distributed to the erstwhile unit holders.
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