Government to sell SUUTI stake in Axis Bank worth ₹4,000 crore
Premium- The offer for sale will open on 19 May for non-retail investors and on 20 May for retail investors with an option to additionally sell 2.2 crore equity shares
The central government may garner close to ₹4000 crore by selling upto 58 million equity shares held in Axis Bank through the Specified Undertaking of the Unit Trust of India (SUUTI) at an floor price of ₹680, the Bank said in a regulatory filing at the stock exchange on Tuesday.
The offer for sale will open on 19 May for non-retail investors and on 20 May for retail investors with an option to additionally sell 2.2 crore equity shares.
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While the SUUTI committed to sale upto 36 million equity shares representing 1.21% of the paid up equity share capital, it retained the option of selling additional 22 million shares representing 0.74% of paid up equity share capital in case of oversubscription.
“In the event that the Oversubscription Option is exercised, the Equity Shares forming part of the Base Offer Size and the Oversubscription Option will represent 1.95% of outstanding Equity Shares (58 million) of the Company as on March 31, 2021," it added.
The central government had sold nearly one crore shares of Axis Bank worth around ₹600 crore last year held through SUUTI, taking advantage of the buoyant equity market.
SUUTI held a 3.45% stake in the bank as of 31 March, according to exchange filings. After the latest sale, its shareholding in the lender is likely to come down to 1.5%.
Parliament bifurcated UTI in 2002 after the company’s US-64 investment plan ran into trouble, creating SUUTI and UTI Asset Management Co. Pvt. Ltd. The former holds the assured-return investment plans of UTI and the latter oversees the market-linked plans.
SUUTI has minority stakes in several listed and unlisted companies, with most of its value locked in hotels-to-personal care conglomerate ITC Ltd (7.93%), and construction engineering company Larsen & Toubro Ltd (1.8%). It had earlier sold off most of its stake in L&T.
The government’s ambitious disinvestment schedule for FY22 may get delayed because of the second wave of the covid-19 pandemic, disinvestment secretary Tuhin Kanta Pandey said at Mint India Investment Summit 2021 last month. Pandey, however, exuded confidence that the ₹1.75 trillion target is still achievable.
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