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Government to revive Suuti; likely to sell its stakes

Friday, 10 January 2014 - 11:09am IST | Place: Mumbai | Agency: DNA

The Cabinet Committee on Economic Affairs or CCEA on Thursday decided to revive Special Undertaking of Unit Trust of India (Suuti) which owns shares worth Rs 34,506 crore. It is now possible that the government may sell its stakes, held via Suuti, in Axis Bank, ITC and L&T. Suuti holds 20.72% stake in Axis Bank (worth Rs 8,065 crore), 11.30% in ITC (Rs 19,801 crore) and 8.2% in L&T (Rs 6,640 crore). 

Thursday’s move also reverses the government’s 2012 decision to wind up Suuti and transfer its assets to a new asset management company or AMC. The proposed AMC was expected to leverage Suuti’s assets to raise funds for buying government’s stakes in state-backed firms. The CCEA decision is likely to help the government to raise up to Rs 8,000 crore by selling part of its stakes, thereby narrowing the wide gap between its Rs 40,000-crore disinvestment target for this fiscal and actual stake sales of only Rs 3,000 crore and Rs 14,000 crore through residual stake sales in firms where it has minor stakes.

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