UTI to return Rs 3,000 crore

UTI-I will be returning money in the next two months.

The Specified Undertaking of the Unit Trust of India (SUUTI) or UTI-I will be returning close to Rs 3,000 crore to the government in the next two months. UTI-I had received this amount as part of a bailout package from the Union government.

Of the Rs 3,000 crore, UTI-I will be repaying around Rs 1,900 crore from the Special Unit Scheme - 99 (SUS) and another Rs 1,000 crore from US-64. "This will be done in the next one to two months," UTI Mutual Fund Executive Director DSR Murthy told Business Standard.

Last year, UTI-I had repaid Rs 3,500 crore from the SUS against the government's initial investment of Rs 3,300 crore in the scheme.

The SUS-99 was launched in 1999 with the intention of taking some of the burden off US-64, which was going through a particularly rough patch.

The government was the sole subscriber to the units. The bulk of the public sector holdings of US-64 was transferred to this scheme. At that time, most of these stocks were neither attractive nor frequently traded.

After the debacle of the US-64 in 2001, the government did not actually pump in any money but offered investors 6.5 per cent tax-free bonds.

However surpluses generated from the sales of the holdings under the scheme are being given back to the government, which is the major shareholder.

This comes in the wake of the fact that the schemes under UTI-I have done extremely well in the last year.

With the equity markets touching new highs in the last few months, the net asset value (NAV) of the most of the schemes under UTI-I are trading at highs.

Payback time

• UTI-I had received the amount as part of a bailout package from the Centre
  
• After the debacle of US-64 in 2001, the government did not pump in money but offered investors 6.5% tax-free bonds
  
  
• Surpluses generated from the sales of the holdings are being given back to the government, the majority shareholder