The government plans to offload up to three per cent stake in Larsen & Toubro (L&T) held under Specified Undertaking of the Unit Trust of India (Suuti) through a block deal on Friday, said investment banking sources.
The base price for the share sale has been set at Rs 1,415.66, about two per cent discount to L&T's closing price of Rs 1,445 on Thursday. The government will be able to mop up around Rs 4,000 crore through the transaction. Suuti owns around 8.32 per cent stake in L&T. Besides L&T, Suuti owns around 11 per cent each in ITC and Axis Bank.
Earlier this year, the government had appointed Citibank, Morgan Stanley and ICICI Securities as investment bankers to manage share sales in companies held in Suuti.
Block deal is a share sale carried on the stock exchange platform to small set of investors through special trades.
This is the first time the government would be monetising its holdings in Suuti. The Centre is looking to divest more shares held under Suuti to help meet its ambitious disinvestment target of Rs 56,500 crore set for the financial year 2016-17. Suuti' entire holdings are worth more than Rs 60,000 crore, which the Centre is likely to divest over a three-year period.
So far this financial year, the government has managed to raise around Rs 21,400 crore through divestments and buybacks, data provided on the Department of Investment and Public Asset Management's website show.
