The government has invited bids from nine investment bankers to offload part of the stake it holds in private sector Axis Bank Ltd through Specified Undertaking of UTI or SUUTI, the bifurcated arm of the erstwhile Unit Trust of India, to raise around Rs 6,000 crore by mid-February, The Economic Times reported.
In a separate report, Business Standard said that all the nine approached for the stake sale are foreign banks and include names like Citigroup, JP Morgan and Morgan Stanley.
The move follows the Union Cabinet’s recent decision to defer the earlier plan to wind up operations of SUUTI, which paved way for the government to sell stake held in blue chip public listed firms like ITC, L&T, apart from Axis Bank.
Presently, SUUTI owns 11.32 per cent stake in ITC, 20.72 per cent in Axis Bank and 8.2 per cent in L&T. As per the current market price, the total value of these stakes is over Rs 47,000 crore or over $7.5 billion.
A part sale of its stake in one or all of its holding in these firms would help the government raise cash to meet its fiscal deficit target.
The government has been hard pressed in meeting its disinvestment target due to the poor state of the primary market despite the stock markets near their all-time highs. The upcoming general elections also complicate the matter as the government cannot take significant decisions on fresh disinvestments.
(Edited by Joby Puthuparampil Johnson)
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