The finance ministry through the Specified Undertaking of the Unit Trust of India (SUUTI) will sell up to a 3% stake in Axis Bank through the offer-for-sale (OFS) mechanism on Tuesday and Wednesday, the bank said in a notification to exchanges on Monday. The floor price for the offer would be Rs 689.52 per share. Axis Bank’s shares ended 1.1% lower than their previous close at Rs 710.35 on the BSE on Monday.
“The Specified Undertaking of the Unit Trust of India (SUUTI) proposes to sell up to 50,759,949 (1.98%) equity shares of face value of Rs 2 each of Axis Bank (the “company”) (“base offer size”), on February 12, 2019 (“T day”), (for non-Retail Investors only) and on February 13, 2019 (“T+1 day”) (for retail investors and non-retail investors who choose to carry forward their un-allotted bids) with an option to additionally sell 26,337,187 (1.02%) equity shares of the company,” the notification stated.
At the end of December 2018, Suuti held a 9.56% stake in Axis Bank. The OFS is part of the government’s move to meet its disinvestment target of Rs 80,000 crore for FY19.
Read Also| Corporation Bank swings back in black as provisions decrease sharp 73 per cent
In the Interim Budget speech, finance minister Piyush Goyal had stated that the disinvestment target for the current fiscal would be achieved. Of the receipts so far, Rs 25,325 crore, or 63%, came through exchange-traded funds (ETFs). At least Rs 14,000 crore is assured from the proposed Power Finance Corporation’s purchase of the Centre’s 52.63% stake in Rural Electrification Corporation for which the Cabinet has already given in-principle approval.
Of the Rs 12,000 crore expected from buybacks by public-sector undertakings (PSUs), the Centre has already mopped up about Rs 4,000 crore and the remaining Rs 8,000 crore would flow in by March. The companies that will undertake buybacks include ONGC, Coal India, Indian Oil and Oil India.