SUUTI-linked stocks rise on LIC stake buying talk

Expect some action on the blue-chip counters where the Specified Undertaking of the Unit Trust of India or SUUTI own significant stakes on behalf of the Government of India.

According to report, the government is in talks with Life Insurance Corporation of India (LIC) to sell part-stake in some of these companies. Some reports say LIC could be buying up to 5 per cent stake mainly in three of these companies, Axis Bank, L&T and ITC.

All these stocks traded higher on Thursday, with ITC gaining 0.20 per cent, Axis Bank 0.55 per cent and L&T 0,70 per cent.

The sale of these stakes held under SUUTI could bring in between Rs 25,000 crore and Rs 30,000 crore to the government exchequer.

For this, the government may need to relax the existing norms as they allow LIC to buy only up to 15 per cent stake in a company. SUUTI owns stake in as many as 43 listed and eight unlisted firms. Among them, it holds 11.17 per cent in ITC, 8.32 per cent in L&T and 11.93 per cent in Axis Bank.

Other listed firms where SUUTI hold significant stakes include ICICI Bank, Bharat Petroleum, Hindustan Unilever, Titan, Tata Steel and Reliance Industries. The combined value of SUUTI holdings in the listed firms is estimated at around Rs 60,000 crore.