Of its total holding of 80 per cent in Rashtriya Chemicals and Fertilisers (RCF), the government is selling 5 per cent, or over 2.75 crore shares, at a floor price of Rs 74.25.
The stake, held by the state-owned Specified Undertaking of Unit Trust of India (SUUTI), was sold through block deals in stock markets, said Neeraj Gupta, the top bureaucrat looking after government stake sales, confirming earlier media reports.
In the past, the government has received criticism for asking LIC to buy stake in ITC, a tobacco company.
Clarifying on the 'conflict of interest' clause, the department of public asset management (Dipam) has allowed the participating investment banks to take up certain types of capital market offerings by rival companies in the private sector.
The government has raised a record Rs 46,247 crore through disinvestment, of which Rs 10,779 crore has come from strategic disinvestment and SUUTI's investment.
The companies listed so far include National Textile Corporation, Fertilisers and Chemicals Travancore, Hindustan Antibiotics, Scooters India and Hindustan Fluorocarbons.
Sources privy to the development say that this ETF would be larger than the Central Public Sector Enterprises (CPSE) ETF, a fund unveiled in 2014 that was made up of the government’s shares in state-owned companies.
Earlier this month, the government divested 2 percent of its stake held in ITC held through the Specified Undertaking of the Unit Trust of India (SUUTI). LIC bought this 2 percent taking its overall shareholding to 16.32 percent.
From the only eligible reported proposal of a Kotak Bank, the list has now widened to include other big names like ICICI Bank, HDFC Bank and HDFC. There could be some over-ambitious mid-sized players also queueing up over the next few weeks.
The Finance Ministry has not received any communication with regard to reported merger of Kotak Mahindra Bank and Axis Bank, a senior official said.
Speaking to Moneycontrol, JN Gupta, Co-founder and MD of proxy advisory firm Stakeholders Empowerment Services (SES) said that in real sense, one arm of the government is the seller and other is the buyer, so at best it a resource [mobilisation] exercise by the government."
A top fund manager was quoted as saying that the largest consolidation in the banking sector is being explored by the shareholders of the two banks, according to a report in The Times of India.
In early trade Tuesday, the government has divested 2 percent of its stake held in ITC held through the Specified Undertaking of the Unit Trust of India (SUUTI).
Cigarette major ITC shares hit record high of Rs 269.50, up 4.5 percent intraday Wednesday as excise duty hike was within the analysts' expectations limit.
On Wednesday, Finance Minister Arun Jaitley announced a divestment target of Rs 72,500 crore for FY18, 60 percent higher than the previous fiscal's revised estimate of Rs 45,500 crore.
In an interview with CNBC-TV18, market expert Ashwani Gujral said that as the market bottoms out, metals could be the first sector to move higher and probably the sector that will lead the market is going to be commodities.
The stake sale is part of the government's plan to raise Rs 565 billion from asset sales during the current fiscal year to March to help contain its fiscal deficit at 3.5 percent of the gross domestic product.
The SUUTI was formed back in 2003 as an extension of the UTI. It consists of 51 companies-8 unlisted and the rest 43 listed. Through SUUTI, the government holds minority stake in these companies and is planning to divest its shareholding.
After the GST rates are finalised, ITC is expected to gain as fears of 40 percent rate abate. ITC holds 7 percent weightage in the Nifty.
L&T shares worth Rs 4040.41 crore as per Thursday's closing price are expected to be sold on November 4.
With the recent downslide in the IT sector, one should keep an eye out for Tier-II stocks in the midcap space which are likely to grow at the cost of some of the large players, says Nilesh Shah of Envision Capital.
In accordance with its plan to dilute share in public sector undertakings (PSUs), the government is now looking to sell some of its stake in NMDC, NALCO, BHEL via offer for sale (OFS) route.
Stake sale by Specified Undertaking of the Unit Trust of India (SUUTI) in Axis Bank is unlikely to happen anytime soon as the paperwork is yet to be completed, reports CNBC-TV18.
First on the plate are the three blue-chip stocks â€“ Axis Bank, ITC and L&T â€“ which contribute to approximately 95 percent of SUUTI‘s holdings in value terms.
Earlier, the merchant bankers were not permitted to enter into any competing transaction for entire three years for which they are being hired and hence, the bankers had approached DIPAM for a change in the clause.