Boston, MA 01/21/2014 (wallstreetpr) – India lists Citigroup Inc (NYSE:C) and JPMorgan Chase & Co. (NYSE:JPM) among other banks to help vend part of its stake in Axis Bank Ltd. (NSE:AXISBANK). Four people with knowledge in the matter, who asked not to be named until a public announcement is made, said that the Indian government is seeking to sell almost half the 20.7% stake it has in the bank.
Government’s effort
Among other listed investment banks was also JM Financial Ltd. The Government had invited bids from nine investment banks earlier this week, as was reported by the Economic Times. The Government is seeking to hire banks to administer the share sale of India’s third largest private sector lender by assets. It is being done in an effort to bridge the budget gap and check the sovereign credit rating relegate to “junk status”.
The share sale
The sale is valued at $927 million (57 billion Rupees). According to data collected by Disinvestment Department, Prime Minister Manmohan Singh’s government has already raised 13% of the intended 400 billion rupees it had aimed to raise by the end of March.
Two people having insight in the matter reported that the share sale might take place before mid- Feb. the banks will be offered a one rupee fee for handling the issue while all the expenses will be borne by the Government.
In December, Arvind Mayaram, the India Economy Affairs Secretary had said that the government is mulling over selling its stake at the SUUTI held Axis Bank. SUUTI that is the Specified Undertaking of the Unit Trust of India is a state run asset manager which also has stakes in Larsen & Toubro Limited (NSE:LT) and ITC Limited (NSE:ITC).
According to Anand Sharma, the Commenrce Minister, the government also has plans to sell its 171.9 billion rupees stake in Hindustan Zinc Ltd, which is owned by Anil Agarwal.
