SUUTI appoints three merchant bankers for stake sale in Axis Bank

Three merchant bankers —J PMorgan,  Citigroup Global Markets and local brokerage J M Financial  — have been appointed by the Specified Undertaking of Unit Trust of India (SUUTI) for sale of government’s stake in India’s third largest private sector lender Axis Bank.

The government owns 20.72 per cent shares in the bank through SUUTI, which has agreed to sell half of it. The shares are likely to be auctioned by end February. Sources said the share sale will likely take place through block deal.

A block deal is deal where a minimum quantity of five lakh shares or shares with a minimum value of Rs 5 crore are transacted through a single transaction window of the stock exchange.

The stake sale of SUUTI in Axis Bank is part of government’s late-begun disinvestment process. On Monday, the government had approved the auction of its residual stake in Hindustan Zinc Ltd controlled by London-listed Vedanta Resources. It has also lined up a 10 per cent stake sale in Indian Oil Corp.

The government has budgeted Rs 14,000 crore by way of residual stake sale in companies in which it does not hold a majority stake.

Earlier this month, the government decided not to wind up SUUTI for the time being, paving way for sale of its holdings in two more private firms -- ITC, L&T. With the government deciding not to wind up SUUTI, it would be able to offload its holdings in these companies separately on the basis of suitable market valuations.