UV Asset Reconstruction Company Limited

8.Justice P.P. Naolekar (Retd.), Chairman _ Independent Director -UV Asset Recostruction Company Limited - The 10 Most Promising Finance Companies In India 2022

UV Asset Reconstruction Company Limited is a Securitisation Company/ Reconstruction Company registered with the Reserve Bank of India. Set up in the year 2007, UV Asset Reconstruction Company Limited (UVARCL) is presently amongst India’s top 10 ARCs in terms of book building with a CAGR of 109% over the last 3 years.

UVARCL is promoted amongst others, by professionals with equity participation of 6 public sector banks and 2 insurance companies’ viz. Central Bank of India, Bank of Maharashtra, Union Bank of India, Bank of India, United Bank of India, Allahabad Bank, United India Insurance Company Limited, and National Insurance Company Limited.

UVARCL acquires Non-Performing Assets (NPAs) from various banks and financial institutions. The company believes in an empathetic approach to resolving distressed assets by meaningful analysis of the cause of NPA, evaluating possible turnaround options, and formulating the best fit strategy under the given circumstances. The company adopts best practices that foster an environment of honesty, transparency, and consistency. The company aims to create a win-win situation for all its stakeholders.

The regulatory framework for ARCs is expected to undergo significant changes during the year. In April 2021, RBI has constituted a committee on Asset Reconstruction Companies under the chairmanship of Mr. Sudarsan Sen, Former Executive Director, Reserve Bank of India. The Committee is mandated to review the legal and regulatory framework to improve the efficacy of ARCs. The terms of reference include a review of business models and matters relating to transparency and governance in ARCs. Further, the committee will review the role of ARC under IBC. It will also examine the issues around the listing of Security Receipts (SR) and improving liquidity in SR trading. The Committee is expected to submit its report by August 2021. ARCs look forward to this development, which may redefine ARC’s business and bring in new growth opportunities.

Another major development is the setting up of a National ARC Ltd (NARCL), popularly known as a bad bank, as announced in Budget 2021. The ARC, with banks as stakeholders, has been incorporated. As per reports, it will focus on fully providing for assets with a ticket size of Rs 500 crore and above, where 75% of lenders agree to sell the assets so that NARCL gets aggregated debts in one go. As per estimates, debts totaling Rs 2 lac crore have been identified by banks for possible transfer to NARCL.

2021 will be a milestone year for ARCs. The industry will have new challenges, new threats. Adaptability to changing environment will be the key to sustainability.

UVARCL has a sector-agnostic approach to investments in stressed firms. The company acquires Non-Performing Loans from Banks and Financial Institutions under the provisions of the SARFAESI Act. After the acquisition, UVARCL evaluates all possible options and accordingly implements a resolution strategy that leads to value maximization for all stakeholders.

UVARCL conducts detailed due diligence before acquisition and underlying risks are analyzed and assessed. UVARCL has a dedicated team of professionals (in-house and external) for conducting financial due diligence, legal due diligence, and underlying asset valuation.

Website- https://www.uvarcl.com/index.html

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