Unit Trust of India (UTI) is looking for short-term money and debt market instruments to deploy its surplus funds.
Money market dealers claim India's largest mutual fund _ with a total corpus of Rs 60,000 crore _ is scouting for investment opportunities of three months or less in the debt markets.
"UTI has been making enquiries about the availability of sizeable quantities of T-bills with less than three months maturity from the market," said one bond market dealer.
According to market observers, UTI has also been scouting for deployment avenues in the commercial paper market. "UTI is willing to look at CP issues by top corporates also for deploying its short term surpluses," said a bank dealer.
The need to park funds in short-term debt instruments follows the decision by UTI chairman P S Subramanyam to reduce the equity holdings of the trust's flagship US-64 scheme from 64 to 60 per cent of total holdings. UTI plans to reduce the equity weightage by investing new funds in non-equity instruments. It does not plan to reduce its equity holdings by selling in the open market.
Market observers feel that the decision to look afresh at debt and money market instruments could be because UTI feels the need for liquidity to guard against any fresh redemption pressure.
