Special Undertaking of UTI (SUUTI), which was formed to take over the assets of US-64 after they plunged drastically in 2002, has appointed JPMorgan Chase & Co., Citibank NA and ICICI Securities Ltd to advise it on the sale of a 21% stake in Axis Bank Ltd. The 21% stake is to be sold in block deals to institutional investors on local bourses over the next two months, according to a report. The third largest private sector lender has a market capitalisation of nearly $6 billion (Rs 25,872 crore), and the 21% stake would be worth $1.24 billion (Rs 5,433 crore). The shares of Axis Bank are trading at Rs 723, as against their 52-week high of Rs 1291. Though SUUTI owns 27% stake in Axis, the other 6% stake cannot be sold as there is a lock-in clause on 6% of the equity, following an earlier QIP.
LIC is one of the major shareholder in Axis, holding more than 10% stake. Five other insurance firms also together hold 55 stake. Some other institutional shareholders include ICICI Prudential Life Insurance, HSBC Holdings and Orient Global Tamarind Mauritius, who hold between 4-5% stake. Earlier it was reported that bank is looking to bring in broad set of investors through a QIP. This was to ensure that the banking regulator's norm of capping a single investor's shareholding in a bank at 5% is adhered to.
SUUTI To Transfer L&T, ITC Stake To Govt
In another development, SUUTI will transfer its residual stake in Larsen & Toubro Ltd and ITC Ltd to government after being wound up in march 2009. SUUTI holds a 9% stake in L&T, which is worth Rs 6,813 crore at current market prices. Its stake in ITC stands at nearly 12%, which is worth Rs 8,547 crore.
UTI AMC To Get Strategic Partner
Also UTI Asset Management Company is bringing in a strategic investor. The firm had differed its IPO last month due to market conditions. UTI AMC planned to dilute 38% of its stake in the public offering, with 20% stake to be diluted in the pre-IPO placements. The firm was planning to raise $500 million from the IPO.