Government garners Rs5,560 cr from Axis Bank stake sale
22 Mar 2014
The government on Friday raised nearly Rs5,560 crore from divesting 9 per cent of its stake in Axis Bank, India's leading private sector lender, through block deals on the Bombay Stock Exchange.
Of the several buyers, state-owned Life Insurance Corp of India bought the largest chunk. Other large buyers were Citigroup Global Markets Mauritius Pvt Ltd, Goldman Sachs Singapore Pte, and New World Fund. However, Unit Trust of India sold a large chunk of its holding in Axis Bank.
The government held a 20.7-per cent stake in the bank through a Specified Undertaking of the Unit Trust of India (SUUTI), the entity that was created about a decade ago when the erstwhile UTI was bifurcated. Funds managed by SUUTI sold the stakes at an average of Rs1,315 a share - a discount of about 3 per cent to Axis Bank's Thursday closing Rs1,357 on the National Stock Exchange.
Following the series of block deals early on in Friday's trading, the stock rallied to close at Rs1,393 - up 2.7 per cent on the day.
The government will retain its remaining stake in Axis Bank, which is worth about Rs7,500 crore.
The Axis Bank deal was executed through the accelerated book building route, which was opened on Thursday evening and closed at 10.30 pm the same night. The execution of the deal was through a series of block deals on the BSE.
According to the term sheet of the deal, after this sell-off, the government is now under obligation not to sell any further stake in Axis Bank for the next six months.