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The government today sold 9% stake held through Suuti in Axis Bank through a block deal, pulling the scrip of the country's third largest private sector lender down by over 3% in morning trade.
According to market sources, the block deal happened soon after the opening of the market in various trades in the price range of Rs 1,313-1,341 a share.
The government is expected to garner over Rs 5,500 crore through the sale of 4.2 crore shares or 9% stake.
Specified Undertaking of UTI (Suuti), formed in 2003 is an offshoot of erstwhile UTI, held 20.72% in Axis Bank. Pursuant to the deal, SUUTI's holding will come down to 11.72%.
Shares of Axis Bank fell to the day's low of Rs 1,313.25, down Rs 44 a piece or 3.21% over previous close. Over 4.92 crore shares of the bank changed hands in the early hours of trade today.
Yesterday the merchant bankers had initiated the process of stake sale and had fixed a price band of Rs 1,290-1,357 a piece for the deal.
The government as per the revised Budget estimate expects Rs 3,000 crore from divestment of residual government stake in private sector companies in the current fiscal ending March.
Block deal is a trade with a minimum quantity of 5 lakh shares or minimum value of Rs 5 crore executed through a single transaction on this separate window of the stock exchange.
Suuti in January had appointed three merchant bankers -- J P Morgan, Citigroup Global Markets and JM Financial -- for sale of its stake in Axis Bank.
Sources said there will be a six month lock-in period following the share sale.
The other promoters of the bank are Life Insurance Corporation, General Insurance Corporation, New India Assurance and National Insurance Company.
