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Govt kicks of its disinvest program, sells 2% in ITC

The stock of ITC hit a 52 week high at 291.95 in early trades on Tuesday 7th February 2017. Its heard that government through its holding company specified undertaking of the unit trust of india (SUUTI) has sold 2 per cent stake in the cigarette company for Rs 6,500 to 6,700 crore.

twitter-logoMahesh Nayak | February 7, 2017 | Updated 12:34 IST
Govt kicks of its disinvest program, sells 2% in ITC

The stock of ITC hit a 52 week high at 291.95 in early trades on Tuesday 7th February 2017. According to reports, the government through its holding company specified undertaking of the unit trust of india (SUUTI) has sold 2 per cent stake in the cigarette company for Rs 6,500 to 6,700 crore.

If holds true than the shares of ITC was sold anywhere between Rs 268 to 277 per share and SUUTI's holding in ITC falls below 10 per cent. As on 31 December 2016, SUUTI held 11.12 per cent stake in ITC.

Its been long since government was planning to divest its stake in companies held in SUUTI for bridging its deficit. Axis Bank and Larsen & Toubro are the other prominent companies shares that are held by the government through SUUTI. As on today's share price Axis Bank and Larsen & Toubro can fetch over 36,300 crore. Through SUUTI government hold 12 per cent and 6.69 per cent stake in Axis Bank and L&T, respectively.

SUUTI has split the divestment programme into three parts.

Group A, which includes its holding in ITC, L&T and Axis Bank, will be up for divestment first.

Group B will include the eight unlisted firms in which SUUTI owns shares. Group C will hold the remaining 40 listed firms held by SUUTI.

The eight unlisted companies in Group B include National Securities Depository Ltd (NSDL), North Eastern Development Finance Corporation Ltd, NSDL e-Governance Infrastructure Ltd, Over the Counter Exchange of India, STCI Finance Ltd, Stock Holding Corp. of India Ltd, Unit Trust of India Investment Advisory Services Ltd and UTI Infrastructure Technology and Services Ltd.
 
Last year the government had eased the conflict-of-interest clause for investment bankers to attract more bankers for advicing the government for the proposed sale of government stake held through SUUTI.

 

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