Govt raises Rs 6700 crore by selling 2% in ITC held through SUUTI

The government today raised Rs 6,700 crore through sale of 2% in Kolkata-headquartered tobacco-to-soaps firm ITC, held through Specified Undertaking of the Unit

The government today raised Rs 6,700 crore through sale of 2% in Kolkata-headquartered tobacco-to-soaps firm ITC, held through Specified Undertaking of the Unit Trust of India (SUUTI).

A man talks on his mobile phone as he walks past an ITC office building in Kolkata (Reuters)

The transaction took place through block deals with Life Insurance Corporation of India (LIC) picking up the entire chunk on offer at a price of Rs 275.85 a piece, sources said.

SUUTI, which was created to take over part of the assets and liabilities of the now-defunct Unit Trust of India, held 11.17% stake in ITC.

“Government has sold 2% stake at a discount of 0.15 paise over previous closing price (Rs 276).

The deal has garnered Rs 6,700 crore to the exchequer,” a source said.

With this, the government holding in ITC through SUUTI has come down to 9.17%.

Shares of ITC were trading at Rs 278.60, up 0.80% in afternoon trade on the BSE.

With this transaction, the government has garnered nearly Rs 39,000 crore from disinvestment so far in the current fiscal through 12 transactions.

The revised estimates for disinvestment target is at Rs 45,500 crore.

Besides ITC, SUUTI also holds stake in 51 companies with major holdings in L&T (6.53%) and Axis Bank (11.53%).

The government intends to lower its stake in these firms over a three-year period and has appointed merchant bankers for advising on the sale process.

The government had in November 2016 sold 1.63% in L&T, while in March 2014 sold 9% stake in Axis Bank to raise Rs 5,500 crore through block deals.