Government may not dilute SUUTI stake in listed companies this fiscal

NEW DELHI: Government is not likely to dilute stake in private companies that it holds through SUUTI as it expects to meet the disinvestment target for the current fiscal through offloading minority interests and strategic sale of state-owned companies.

"Dilution of stake held by SUUTI is not a priority now. We will focus on PSU stake sales through OFS and IPO. We will also look at strategic sale at appropriate time," said a source.

Specified Undertaking of UTI (SUUTI), formed in 2003, is an offshoot of erstwhile UTI. It has investments in several unlisted companies.

Among the listed entities, SUUTI holds 11.72 per cent in Axis Bank, 11.27 per cent in ITC and 8.18 per cent in L&T.

In March 2014, the government sold 9 per cent of its stake in Axis Bank held through SUUTI for over Rs 5,500 crore.

The disinvestment department has lined up a host of companies for disinvestment in current fiscal to meet the budgeted target of Rs 56,500 crore. The list of over a dozen PSUs include ONGC, Oil India, NMDC, Coal India, NTPC and MMTC.

Of the budgeted target, Rs 36,000 crore is estimated to come from minority stake sale in PSUs, and the remaining Rs 20,500 crore is projected to come from strategic sale in both profit and loss-making companies.