Govt may sell stake in Axis Bank, ITC, L&T via ETF: Report

The government may sell some of its stake in Axis Bank, Larsen and Toubro and ITC through an exchange traded fund, reports BloombergQuint.

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.

Post the newsbreak yesterday, the price of all three stocks fell.

The government currently holds 12.02 percent stake in Axis Bank, 9.10 percent in ITC and 6.69 percent in L&T, through the Specified Undertaking of the Unit Trust of India (SUUTI). This is after considering the recent 2 percent stake sale in ITC.

The government had revised its disinvestment target for FY17 to Rs 45,500 from Rs 56,500 earlier and for FY18 the government hopes to raise a humongous Rs 72,500 crore.

Government officials told NewsRise it is not yet decided to include the SUUTI holdings in the ETF stake sale. The government is free to include any of its equity holdings under the new ETF.

SUUTI was formed in 2003 as an extension of the Unit Trust of India (UTI). It comprises 51 companies -- 8 unlisted and the rest listed companies. Through SUUTI, the government holds minority stake in these companies and divests its shareholding from time to time.