The government-controlled Specified Undertaking of Unit Trust of India (SUUTI) has sold over 9 per cent or almost half of its stake in Axis Bank for around Rs 5,557.2 crore ($912 million) through bulk deals executed on BSE on Friday.

SUUTI held 20.7 per cent equity stake in Axis Bank and the government was looking to divest its holding in a few listed firms as part of its move to rein in the fiscal deficit for the year.

As per exchange data, part of the shares was acquired by state-controlled insurance giant LIC, which picked shares worth Rs 1,116 crore. Other buyers include FIIs like Citigroup, Goldman Sachs and New World Fund.

With this deal, LIC joins SUUTI to become the

single-largest shareholder of Axis Bank with around 11 per cent stake each.

LIC has long been used by the government to support its plans to divest stake in other PSUs either through direct sale or through public offers.

The latest deal comes within a week of the government pushing through another share sale where state-run ONGC and Oil India picked up 10 per cent stake in IOC for Rs 5,340 crore, as part of the strategy to meet the divestment target.

The stake divestment in Axis Bank 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 also owns 11.32 per cent stake in ITC and 8.2 per cent in L&T.

SUUTI is the bifurcated arm of the erstwhile Unit Trust of India. It was formed in 2003 as a National Asset Management Company (NAMC) to manage the assets owned by UTI, following the restructuring of UTI after its assured-return schemes collapsed.

A year ago, Axis Bank, the third-largest private lender in the country, had closed one of the largest equity issues in recent times by raising over Rs 4,726 crore through a qualified institutional placement (QIP). This is part of the total fundraising of Rs 5,537 crore, which included a preferential allotment to certain promoters of the bank.

State-controlled insurers LIC, GIC, National Insurance, United India Insurance and New India Insurance had subscribed to the preferential allotment.

(Edited by Joby Puthuparampil Johnson)

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