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UTI's favourite stocks

Aabhas Pandya

"Mirror, mirror on the wall; who's the most fancied of them all?" Pose this question to Unit Trust of India chairman P S Subramanyam and he would reply Reliance Industries without batting an eyelid. Well, UTI's funds simply rely on the company's stock for performance and returns. The 29 open and close-end equity funds of Unit Trust of India hold an exposure of Rs 7.81 billion in the petrochemicals major. In other words, the funds hold 18.9 million shares of this Fortune 500 company. The investments range from Mastershare and Mastergain to UGS 10000 and UTI GSF Services Sector Fund.

The stock is also the top equity holding (14.99 per cent) in the balanced fund, US-64. Assuming that the fund had a size of Rs 160 billion on February 28, the fund owns another 58 million shares with an investment of Rs 24 billion! The funds thus hold a staggering Rs 32 billion of stocks, the UTI funds hold 5.7 per cent of the company's total equity at Rs 13.46 billion. This still excludes the string of monthly income plans, where UTI has also invested in Reliance's equity shares.

That's not all. The funds, including US-64, have put another Rs 12.26 billion in Reliance Petroleum. This fund own roughly 200 million shares of the refining company with US-64 taking the lion's share at 163.7 million shares. This is almost 5 per cent of the company's equity of Rs 42.99 billion.

Among other firm favourites are ITC, HLL, Infosys, Satyam Computer, Hindalco, L&T and MTNL, in that order. Such is the dominance of U-9 (including Reliance companies) in UTI's equity portfolios that they accounted for 51 per cent of the total assets of Rs 72 billion under the 29 equity funds on February 28, 2001. The pre-eminent holding in these stocks gives a diversified flavour to the Trust's investments. Further, all these companies are leaders in their industries with large capitalisation, a well-spread holding pattern and hence, offer high liquidity. The high exposure in these stocks has also been necessitated with the large asset base of most UTI funds.

And, despite the sharp fall post-budget, these stocks still continue to maintain their mellowed yet dominant position. But for Himachal, which has seen its weight erode with a sharp drop in price, UTI would have surely provided us with its list of U-10!

UTI's U-9

Company	Investment* (Rs Cr)
Reliance Ind	781.59
ITC	680.37
HLL	625.22
Infosys	598.00
Satyam	252.54
Reliance Petro	213.15
Hindalco	179.68
L&T	177.32
MTNL	162.29

*Except US-64

Source: Value Research

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