Axis Bank stake sale tomorrow, price band at Rs 1290-1357

Government will sell less than half of its stake held through SUUTI in Axis Bank tomorrow through a block deal for upto Rs 5,700 crore.

Specified Undertaking of UTI (SUUTI), formed in 2003 is an offshoot of erstwhile UTI, holds 20.72 per cent in Axis Bank.

The government is selling 4.2 crore shares or about nine per cent of its holding in a block deal tomorrow in the price band of Rs 1,290—1,357 per share, sources said.Merchant bankers have initiated the process for stake sale, they added.

Shares of the lender closed 2.1 per cent down at Rs 1,356.85 apiece on the BSE today.

Block deal is a trade with a minimum quantity of 5 lakh shares or minimum value of Rs 5 crore executed through a single transaction on this separate window of the stock exchange.

SUUTI in January had appointed three merchant bankers - J P Morgan, Citigroup Global Markets and JM Financial - for sale of its stake in Axis Bank.

Sources said there will be a six month lock—in period following the share sale.

Govt likely to achieve revised disinvestment target of Rs 16,000 crore with CPSE-ETF

With strong investor response to the current CPSE-Exchange Traded Fund (ETF), the government is likely to achieve the revised disinvestment target of Rs 16,000 crore for the current fiscal. Buoyed by strong demand from retail and institutional investors, CPSE- ETF, involving the equity shares of ten PSUs, has garnered cumulative bids of over Rs 2,400 crore at the end of third day on March 20. The government aims to garner Rs 3,000 crore from this ETF with the closure of the new fund offer by March 21.

The CPSE-ETF, which will get listed on the stock exchanges on April 11 and can be traded like any stock, consists of a basket of 10 blue-chip public sector enterprises, including Coal India, ONGC, Oil India and IOCL and among other. CPSE-Exchange Traded Fund, which opened for anchor investors. State Bank of India and insurance companies, have already put in Rs 835 crore into this ETF.

The Government had originally planned to raise Rs 30,000 crore through disinvestments during current fiscal, but after stake sale plan with regard to some of the PSUs did not go as planned, it pruned the target to Rs 16,000 crore. Now the government is tapping the ETF route for achieving disinvestment target. The government has so far undertaken two follow-on public offers (FPOs), six offers for sale (OFS) and one buy-back offer besides the present ETF to achieve the disinvestment targets during the current year.

RBI working on new regulatory structure to strengthen country’s financial sector

In a move to strengthen the country’s financial sector, the Reserve Bank of India (RBI) Governor Raghuram Rajan asserted that there was considerable introspection going on within the central bank for formatting a new regulatory structure as a number of RBI’s internal committees are assessing the various concerns like need of seamless regulations and the level of regulatory arbitrage required while regulating institutions with similar functions.

Concerned over rising NPAs level of banks in India, the Governor highlighted the need for banks to improve their 'credit risk management' skills as well as power over the borrowers. The apex bank is also working on new bankruptcy law and distress resolution mechanisms, which would help to address the issue. He further highlighted that banks should work hard to bring inflation down along with inflation premium and the credit risk premium.

Expressing the need to improve human resources, RBI chief stated that the central bank is planning to introduce more training institutes for banks’ employees and set tests for banks’ top officials, and accord a 'fit and proper’ criteria for directors that would include grasp over the basics of the business, annual reports, balance sheets and risk management.