March 21 (Bloomberg) -- India raised 55.6 billion rupees ($912 million) from the sale of a 9 percent stake in Axis Bank Ltd., helping Finance Minister Palaniappan Chidambaram surpass his $3.1 billion asset sale target for this fiscal year.
The government priced 42.2 million Axis Bank shares at 1,315.14 rupees, a 3.1 percent discount to yesterday’s closing price, two people with knowledge of the matter said, asking not to be identified as the details are private.
The stake sale bolsters efforts by Chidambaram to narrow the South Asian nation’s budget deficit to 4.6 percent of gross domestic product in the year to March 31. The government is set to raise about 214 billion rupees selling stakes in companies in the financial year ending this month, higher than the 190 billion rupees target set on Feb. 17.
Citigroup Inc., JM Financial Ltd. and JPMorgan Chase & Co. arranged the Axis Bank share sale, the people said. The banks working on the deal will get a fee of one rupee, while the expenses will be paid by the government, people familiar with the matter said Jan. 21.
The government held a 20.7 percent stake in the bank before the sale, through the Specified Undertaking of the Unit Trust of India, exchange filings show. K.N. Prithviraj, the administrator of SUUTI, didn’t answer three calls to his mobile phone seeking comments on the share sale.
Axis Bank gained 2.7 percent to 1,394.25 rupees at close in Mumbai, making it the best performing stock on the 12-company S&P BSE Bankex index.
The finance ministry is in the process of raising 30 billion rupees through an exchange-traded fund of state-run company shares, Alok Tandon, joint secretary at India’s disinvestment department, told reporters March 14. The sale managed by Goldman Sachs Asset Management (India) Ltd. will close today.
The disinvestment department had raised as much as 128 billion rupees as of March 14 from the sale of stakes in companies including Indian Oil Corporation Ltd. and Bharat Heavy Electricals Ltd., exchange filings show.
Chidambaram in Feb. 28, 2013 set a target of raising 540 billion rupees in the 12 months to March 31. He cut the forecast to 190 billion rupees on Feb. 17.
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