Fund houses in India are working overtime, trying to bag Rs 8,000 crore in new accounts. That is because India's oldest mutual fund, US-64, is gearing up for redemption on May 31.

If you invested Rs 1 lakh in India's first mutual fund 44 years ago-the 'Unit Scheme 64' or US-64-you would have 28 times that amount today. 

The fund nears redemption on May 31 and it's corpus stands at a whopping Rs 8,000 crore; something big fund houses are waiting to get a piece of.

“The entire asset management industry is looking at it as an opportunity to grab a share of it. They are also sharing this information with their distributors and saying that some of your clients might have invested in UTI bond and if they redeem, you have an option to suggest them to break it into a portfolio where they could divide their money in to several schemes,” said Anil Chopra, CEO, Bajaj Capital.

Sources say Birla Sun Life MF is pushing its balanced and monthly income schemes, as it believes that most of the potential investors will be senior citizens, with a low risk appetite. SBI Mutual Fund has even published ads promoting its balanced fund to this audience.

Industry insiders say Reliance and Franklin Templeton also have similar plans. However, both funds refused to comment.

Not to be left behind, UTI MF itself is gunning for a share of its old clients, offering both equity and debt schemes.

“As a company in the MF business and a sister organization, we do expect a good portion of that money coming in to buy UTI MF products,” said UK Sinha, CMD, UTI MF.

UTI MF is sharing its database of US-64 investors with its distributors. The race is now on to see who can get the biggest chunk of this Rs 8,000 crore.

By Srujani Panda and Pooja Meswani, CNBC-TV18