The corporate sector largely remained unfazed by Unit Trust of India's plan to crack the whip and push companies towards performing better.
While 11 of the top 26 companies, where US-64 has the largest exposure, are public sector undertakings, the rest are private sector majors like Reliance Industries, Hindustan Lever and Telco.
According to market observers, PSUs will remain largely unaffected. "The majority holding in IDBI is still with the government, and the institutions hold a small percentage," an IDBI official said
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Many PSU scrips are quoting low prices. This, however, is largely due to other reasons like poor market conditions.
For the private sector, the economic slowdown coupled with global crash in commodity prices has resulted in poor performance.
"Today in hindsight, I cannot be blamed for getting into a particular business 20 years back," an Indian Rayon official said. He, however, agreed that "as lenders to corporates, it is their right to monitor the performance of these corporates".
UTI has lent to almost all the companies where they have an equity holding, mostly by subscribing to their debt papers.
A good corporate, nevertheless, need not worry about any adverse action from the largest mutual fund, the official added.
In case UTI decides to take the extreme measure of selling the entire block to "strategic investors", foreign banks or financial companies could acquire large stakes in Indian majors like IDBI, ICICI and HDFC.
Saying that the situation could be merely a hypothetical one, the IDBI official pointed out that even now there were foreign holdings in the institutions.
In most large corporates today, promoters have a large controlling stake which does not make a sell out a real threat, he said.
A Hindustan Lever spokesperson said, "Institutions have just about 12 per cent holding in HLL which will eventually reduce once the HLL-Ponds merger is through." Again, in case of large scale sale of shares to a third party, the acquirer may demand a representation on the board.
The HLL spokesperson, however, said that most companies have external directors on the board and hence this will not pose a major threat to their operations.