In what would be the largest merger of fund schemes in India, the Unit Trust of India (UTI) plans to merge seven of its closed-ended equity linked savings schemes (ELSS) with a total corpus of Rs 713 crore.
While the nitty-gritty of splitting the mutual fund behemoth into UTI-I and UTI-II are being thrashed out, the present management of UTI has chalked out a blueprint to consolidate its portfolio of schemes by merging look-alike schemes and launching innovative products.
The trust will shortly approach the Securities and Exchange Board of India (Sebi) for approval. UTI had already conducted a mock run of the portfolio of the proposed scheme and it did not violate any of Sebi's investment guidelines, said a senior UTI official.
All existing unitholders will be allotted units in proportion to the net asset values of their current holdings in the new scheme to be called Master Equity Plan Unit Scheme. While the scheme will remain a closed-ended one with a repurchase facility, no fresh sales will be allowed.
Unitholders will be given the option to exit the fund at no load for a period of one month in line with Sebi
