Govt paves way for stake sale in Axis Bank, L&T and ITC by deferring SUUTI closure

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The Union Cabinet on Thursday deferred the decision to wind up Specified Undertaking of UTI (SUUTI) and create a National Asset Management Company (NAMC) to manage the assets owned by it. The move will pave way for the government to sell its stake in three of the Sensex listed private sector firms—Axis Bank, ITC and L&T.

I&B Minister Manish Tiwari on Thursday told reporters that "Finance ministry proposal on SU-UTI has been approved."

The government through SUUTI currently holds 11.32 per cent stake in ITC, 20.72 per cent in Axis Bank and 8.2 per cent in L&T. The total holding in three companies is estimated at around Rs 47,000 crore. Experts said that selling the stake in Axis Bank could fetch government Rs 11,527 crore, the L&T stake Rs 7,382 crore and the ITC stake Rs 28,336 crore.

According to an Economic Times report, the government could begin the stake sale in three companies with Axis Bank as last month it had raised its foreign investment limit to 62 per cent from 49 per cent.

The overall process of monetizing the SUUTI holdings also becomes essential for the government as it struggles to meet its fiscal deficit target for the fiscal.

Dion Global Solutions Ltd.

Read more about: government, senxex, lt, axis bank, itc
Story first published: Friday, January 10, 2014, 9:12 [IST]
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