UTI to launch bond targeted at NRIs in Middle East

UTI International, the 100 per cent-owned subsidiary of India's giant UTI Asset Management, has broken fresh ground with a new bond aimed at Indians living in the Middle East.

The UTI Masterplus Linked Notes, as the new product is called, will be launched on Saturday.

It is the first of a series of close-ended notes to be called The India Equity Plus Series which the company plans to launch.

Each note will be of $1,000 value and the minimum investment has been fixed at $5,000 or five notes.

Additional investments may be made in multiples of one note.

UTI IL, with a paid up capital of £240,000, hopes to raise $25 million through the issue which has a six-year maturity period.

The notes will enjoy a capital guarantee on maturity from Societe Generale (SG).

G. Pradeepkumar, chief executive of UTI IL, said: "This is the first time a capital guarantee product has been designed with an India rupee denominated underlying fund."

While UTI IL would provide investors with service support, SG will invest the proceeds from the issue in the Masterplus Unit Scheme managed by UTI Asset Management Company (AMC) in India, and J.P. Morgan Fund Liquidity Fund.

SG will provide the bid and offer prices on a weekly basis.

Pradeekumar said the Indian equity market has been in a bull phase, rallying for seven consecutive months with the Bombay Stock Exchange Index rocketing from 2,949 early in May to 5,044 last month.