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Axis Bank shares retreat from recent peak as government announces exit

Axis Bank shares retreat from recent peak as government announces exit

Axis Bank shares retreat from recent peak as government announces exit
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By Kanishka Sarkar  Nov 10, 2022 3:49:35 PM IST (Published)

Specified Undertaking of the Unit Trust of India (SUUTI) is selling its 1.5 percent stake in Axis Bank. Here's how the Street reacted to it

Axis Bank’s share price declined on Thursday, November 10, retracing from the closing high touched a day earlier. The fall follows the government's decision to exit India’s fifth-largest lender by market value with the sale of its 1.55 percent stake.

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In Thursday’s trade, Axis Bank shares declined 3.5 percent to Rs 843 on BSE after closing at a high of 874.35 on Wednesday.
The downtrend follows the announcement of plans to sell 4.65 crore shares representing a 1.55 percent stake in Axis Bank by the Specified Undertaking of the Unit Trust of India (SUUTI), which comes under the Union government.
The government will sell the stake at Rs 830.63 per share, a 5 percent discount from Wednesday's closing price, according to a regulatory filing. The total comes to around Rs 3,865 crore. With this sale, the government would completely exit the private sector lender.
Bain Capital, which sold a 1.24 percent stake via a block deal on November 1, still holds a 3 percent stake in Axis Bank. If the former wants to offload more stake it can only do so after three months or 90 days cooling period. Bain Capital’s block deal's floor price was Rs 888 per share.
In 2017, Bain Capital picked up a stake of 4.8 percent in Axis Bank for Rs 6,854 crore.
As the government's stake sale in Axis Bank starts on Thursday, non-retail investors can place their bids on the same day, while only retail investors will be allowed to bid for the shares on Friday.
ICICI Securities Limited, Citigroup Global Markets India Private Limited, and Morgan Stanley India Company Private Limited are the share sale brokers. ICICI Securities is acting as the settlement broker, as per the filing.
Meanwhile, amid buzz on the fate of SUUTI's stake in ITC, the trust made it clear that there were no plans to sell more shareholding in the diversified conglomerate. As of September 2022, SUUTI held a 7.87 percent stake in ITC, which at the company's current market price, would be valued at Rs 34,140 crore.
SUUTI last pared its stake in ITC in February 2017, when 2 percent equity was sold at Rs 291.95 per share. The number of shares that SUUTI has held in ITC has remained consistent over the last four years.
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