The Unit Trust of India (Specified Undertaking) and UTI Mutual Fund have begun to reap the benefits of the balance-sheet cleaning exercise being undertaken by most companies. The two UTI entities have together recorded a 61 per cent jump in recoveries at the end of FY2004 as a result of this cleansing.With the improved economic scenario, corporates have undertaken the task of improving their image by cleaning their balance sheets and raising their credibility with lending institutions. They are now making all efforts to get out of the defaulters’ list of lending institutions so as to take advantage of raising monies both locally and globally at competitive rates.This attitude of corporates is being clearly reflected in UTI’s recovery list for the financial year 2003-04. UTI (which includes both UTI-I and UTI MF) has recovered Rs 1,090 crore in FY 2004, a jump of over 61 per cent from last fiscal, which stood at Rs 675 crore.Out of this recovered amount, Rs 164 crore went to UTI MF and Rs 926 crore in the account of UTI-I or the Specified Undertaking of UTI. During the same period of the previous fiscal, UTI MF recovered Rs 117 crore and UTI-I collected Rs 558 crore. Though UTI MF came into existence only in February 2003, the break-up in this case is available, since the recoveries have been made scheme-wise. All recoveries made are credited back to the relevant schemes which ran up these dues.On the sharp jump in recoveries for FY 2004, Ajeet Prasad, executive director, UTI Asset Management Company, said: ‘‘The improved economic activity in all areas has resulted in corporates straightening their acts and also on account of stakeholders expecting better performance from them.’’UTI had earlier decided to keep all schemes open for two years, even after their maturity dates so that such recoveries can be distributed back to the unit holders as and when they come in.Asked whether any concessions were offered to these corporates for recoveries, Prasad said: ‘‘The package for recovery has to address things like the scheme requirement and our assessment of what the company can pay externally and internally. Major emphasis is given for one-time settlement.’’‘‘In case of deferred payment, we take a view on the current interest rate and along with that, we see to it that a significant amount is paid upfront,’’ he said.The upfront payment should be backed up by certainties like post-dated cheques, securities, escrow accounts etc, Prasad added.‘‘The Securitisation Act is also a big booster for distressed assets to get converted into performing assets and also for industry to restore its health,’’ he added.
