JM Financial Ltd. (JM) was also among the preferred investment banks that may be hired to manage the share sale of the country’s third-largest private-sector lender by assets, said the people, asking not to be identified before a public announcement. The government will sell about half of its 20.7 percent stake in the bank, the people said.
The sale valued at 57 billion rupees ($927 million) is part of India’s efforts to narrow its budget gap and prevent a sovereign credit-rating downgrade to so-called junk status. Prime Minister Manmohan Singh’s government has raised 13 percent of the targeted 400 billion rupees it planned to raise by March 31, according to the Disinvestment Department’s data.
The banks will get a fee of one rupee for managing the issue while the expenses will be paid by the government, the people said. The share sale will probably happen before mid-February, two people said. Finance ministry spokesman D.S. Malik wasn’t available for comment when called in his office.
India Economic Affairs Secretary Arvind Mayaram said in December the government is considering selling its stake in Axis Bank, which is held by the Specified Undertaking of the Unit Trust of India, or SUUTI, a state-run asset manager that also owns stakes in Larsen & Toubro Ltd. and ITC Ltd.
The government plans to sell its 171.9-billion rupee stake in billionaire Anil Agarwal-owned Hindustan Zinc Ltd., according to Commerce Minister Anand Sharma.
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