BENGALURU: The government has raised Rs 6,700 crore by selling two per cent stake in ITC, which it held through the Specified Undertaking of the Unit Trust of India (SUUTI). The transaction took place through block deals with Life Insurance Corporation of India (LIC), which bought all the shares at Rs 275.85 apiece.
SUUTI had held an 11.17 per cent stake in ITC prior to this. With this, the government holding in ITC through SUUTI has come down to 9.17 per cent. It was created to take over the assets and liabilities of the now-defunct Unit Trust of India.
“The government has sold a two per cent stake at a discount of 0.15 paise over the previous closing price (Rs 276). The deal has garnered Rs 6,700 crore to the exchequer,” according to a source, as reported PTI.
SUUTI has stake in 43 listed and eight unlisted companies including blue-chip companies such as ICICI Bank, Bharat Petroleum Corporation, Hindustan Unilever, Titan and Reliance Industries. The biggest holdings in individual companies are in ITC, Larsen & Toubro and Axis Bank.
The government’s disinvestment income this fiscal after 12 transactions stands at Rs 39,000 crore. The revised estimate for Budget 2017’s disinvestment target is at Rs 72,500 crore against Rs 45,500 crore last year.
Applications have been invited from merchant bankers in a request for proposal for advising on the sale process. The government intends to lower its stake in these firms over a three-year period.
The government had in November 2016 sold 1.63 per cent in L&T, while in March 2014, it sold a nine per cent stake in Axis Bank to raise Rs 5,500 crore through block deals.
The shares of ITC rose as much as 5.5 per cent in early trade to a record high of Rs 292.15 after news of the sale.