Recently, the Indian government has sold nearly 2.5% of its equity stake, which it held through its investment arm Specified Undertaking of Unit Trust of India (SUUTI), in the leading engineering company Larsen & Toubro. The stake was worth over Rs.4000 crore. With this, the government has inched closer to achieving its disinvestment target of Rs.72,500 crore during the course of the financial year between 2017 and 2018.
L&T Shares Benefit from Stake Sales by Government
The information was revealed by Department of Investment and Public Asset Management Secretary, Neeraj Kumar Gupta on Wednesday. The L&T stake sale covered one block deal on NSR and six block deals on BSE. With the completion of sale, the L&T shares hit over 1.7% to the day’s high of over Rs 1, 781 on BSE as the news broke. Later on the day they were trading up 0.9% at Rs. 1,766. Also the company’s stock reportedly rose by an impressive 30% this far since the commencement of the present calendar year.
Meanwhile, the BSE Sensex for the day went down 0.25% at 31,219.87 points. With the latest stake sale, the government’s share in L&T reached 4.2% from 6.7% earlier. SUUTI, the investment arm of the Indian government, currently holds stake in more than 50 companies, including giants such as Axis Bank, ITC, and L&T, which were held by the erstwhile Unit Trust of India before SUUTI came into being.
The government is moving ahead with its disinvestment plan through SUUTI. The government has mulled selling SUUTI’s equity holding several times before. Talks are doing rounds that it has plans of reportedly include SUUTI’s equity stakes in the upcoming CPSE ETF or public sector enterprises’ exchange-traded fund, which it plans to launch by the end of 2018.