Govt sells 1.6% stake in L&T for Rs 2,100cr.

The government on Friday sold nearly 1.5 crore shares of construction and engineering major Larsen & Toubro (L&T), or 1.6%, for about Rs 2,100 crore, sources said.



Of the total stake sold, about 56.6 lakh shares were bought by SBI for Rs 800 crore, disclosures on the two stock exchanges showed. The government stakes were held in Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), which came to it about 15 years ago post the reorganisation of the former UTI.

Funds mobilised through this stake sale will help meet the government's target to garner finances through divestments in various PSUs and strategic holdings. In the budget in February, the government had set a Rs 56,500-crore divestment target.

After years of deliberations, the government had finally decided to offload up to 3% stake in L&T for nearly Rs 4,000 crore through block deals. Post this sale, SUUTI will still hold about 6.7% in L&T, worth around Rs 8,700 crore.

As a result of Friday's stake sale, which increased the supply of L&T shares in the market, the stock of the company closed 1.8% down at Rs 1,419. Citibank's securities arm, ICICI Securities and Morgan Stanley managed the L&T deal on behalf of the government.

In addition to L&T, the government, through SUUTI, also holds stakes in ITC and Axis Bank. Together with L&T, the aggregate value of these stakes is nearly Rs 54,000 crore. Earlier, life insurance major LIC was negotiating with SUUTI to buy part of its L&T stake directly so that the market is not disrupted by sudden supply of a large volume of papers of the company.

Courtesy:- Times of India.