The Hindu Business Line : GIC Mutual Fund revamps operations

While a couple of debt products have been rolled back a few weeks ago, its liquid scheme has now been wound up. A close-ended equity linked savings scheme has been redeemed as well.

The mutual fund, which currently has one close-ended and four open-ended products in its stable has, in effect, streamlined operations, a move that may go down well with potential buyers.

However, prospective bargain hunters who are chasing assets may not be similarly keen on an outfit that has missed a chance of leveraging its schemes (that have been wound up) and shore up its asset base, said sources watching the development.

Mr Thomas Panamthanath, CEO, when contacted, felt it is too early to comment on the outcome of the bids that have been reportedly placed by a few fund houses. "We are not in a position to reveal more at this juncture," he said, adding that the process of closing down schemes has been going on for some time, prompted as it is by a recent SEBI directive.

The market regulator has stipulated that open-ended schemes must have a minimum 20 investors with no single entity holding more than 25 per cent of the corpus.

As for GIC Liquid, the mutual fund had earlier withdrawn the dividend re-investment plan, which had no investors since mid-January 2004. The growth plan was withdrawn some time later. GIC Debt and GIC Gilt too had no corpus under their dividend plans on the effective date of withdrawal; the two growth plans did not meet SEBI's minimum criteria and were wound up in late March.

"GIC Taxsavers' Growth Plan was a close-ended scheme that was required to be redeemed this year," Mr Panamthanath said, adding that the mutual fund will do the same with regard to GIC Taxsaver '95, which will come up for redemption next year. The first was an equity linked savings scheme launched ten years ago.

According to a senior official with one of the bidders, any prospective buyer will have to reckon with a few important factors related to the mutual fund. The latter, it is pointed out, has been among the older players in the Indian asset management industry, set up in the early 1990s with the backing of such solid sponsors as GIC and the four general insurance companies.

The asset management company, GIC AMC, also had a strategic investor in SC Management Co Inc, of the US, an affiliate of the Soros group, which delegated a director (Dr Purnendu Chatterjee) on the AMC's board. GIC Housing Finance was also a small stakeholder.