CIOReviewIndia Team | Wednesday, 06 May 2020, 07:35 IST
The government of India is planning to raise over INR 22,000 crore by selling its entire stake in ITC Limited and Axis Bank. Currently, the government owns 7.94 percent in ITC Limited and 4.69 percent in Axis Bank through Specified Undertaking of the Unit Trust of India (SUUTI).
The government is seeking to complete the transaction by the end of first or second week of May, considering the severe economic slowdown owing to coronavirus outbreak. “Given the current timeline, the government is hoping to complete the transaction by the end of this week or early next week,” said a person familiar with the developments. “The transaction will be done through a bulk deal on the Indian bourses,” he added.
As the investor community expected a surge in bad loans, the stock of Axis Bank has fallen 53 percent in the last three months, while that of ITC have come down by 19 percent. At the current prices, the combined value of SUUTI stake in Axis Bank and ITC Limited is INR 22,123 crore. Following the current sale, the government will completely exit from the two companies. Centre has already sold its complete stake in L&T.
The government’s move to sell its holdings in the ITC and Axis Bank is a part of its larger plan to raise an amount of INR 2,10,000 crore from the sale of its stakes in state-run enterprises. It includes INR 90,000 crore to be raised from the sale of a minority stake in Life Insurance Corporation through an initial public offer and equity sale in IDBI Bank.
The government through SUUTI has holdings in 51 companies, of these NSDL, STCI Finance, UTI-IAS, North Eastern Development Finance Corporation, Stock Holding Corporation of India, UTI Infrastructure Technology Services, NSDL e-Governance Infrastructure and Over-the-counter Exchange of India are the companies wherein the government own significant stakes.
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