The government is all set to launch an offer for sale to divest up-to to 3% of its stake in the Axis Bank which is held through Specified Undertaking of United Trust of India (SUUTI) to meet the disinvestment target of the current fiscal year.
The disinvestment plan will render Rs 5,500 (approx.) into the government’s treasury and will help the it in meeting its current disinvestment target.
Government is going to sell 1.98% stake at a floor price of Rs 689.52, which is roughly 3% lower then the closing price of Rs 720.3 per share on February 11. The offer will open on February 12 for non-retail investors and for retail investors the date finalised is 13th February.
SUUTI was created by government, to take over the defunct Unit Trust of India. This fiscal year government has planned to sell its stake in various other entities too, so as to meet the rising fiscal deficit. Fiscal deficit has been marked higher to 3.4% of GDP from the previous 3.3%,for the current fiscal in the interim budget.
This is due to the government’s various loan waivers for farmer and increased expenditure for various other schemes announced by the BJP government ahead of the General elections 2019. So far government has been able to accumulated around Rs 35,000, roughly half of its previously set disinvestment target for current fiscal year.