SUUTI stocks feel the hit

India’s largest cigarette maker ITC and private sector lender Axis Bank are among the top losers on the local bourses today as reports of government mulling the sell of its stake held in these companies through Specified Undertaking of the Unit Trust of India (SUUTI).
The government plans to raise Rs 22,000 crore by selling its entire stake in ITC and Axis Bank, media reports suggest.

Given the current timeline, the government is likely to complete the transaction by the end of this week or early next week. The transaction will be done through a bulk deal on the Indian bourses.
The government held stakes through SUUTI, which owns 7.94% in ITC and 4.69% in Axis Bank, as on March 31, 2020.
Shares of Axis Bank settled at Rs 389.2, down 3.38 per cent, while ITC was marginally down (15 paise) to Rs 173.9 at close of market hours Tuesday on the BSE. At this price, the combined value of SUUTI stake in ITC and Axis Bank is Rs 22,123 crore.

The Axis Bank stock has fallen 53% in the last three months as investors expect a surge in bad loans. ITC has come down 19% compared with the Sensex, which has lost about a quarter.
SUUTI has minority stakes in 51 listed and unlisted companies, with most of its value locked in Axis Bank, ITC and L&T. It has already sold its entire stake in L&T.

Of the 51 companies, eight entities in which SUUTI owns either significant minority or majority stake are — NSDL, STCI Finance, Over-the-counter Exchange of India, Stock Holding Corporation of India, UTI-IAS and UTI Infrastructure Technology Services, North Eastern Development Finance Corporation and NSDL e-Governance Infrastructure.

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