FinMin plans to sell more SUUTI holdings

NEWDELHI: The finance ministry plans to sell more of its Specified Undertaking of the Unit Trust of India (SUUTI) holdings separately this year even after including the three stocks under SUUTI in the upcoming second exchange traded fund (ETF), Bharat 22. An ETF is a basket of stocks with assigned weights that reflects the composition of an index.

Finance minister Arun Jaitley announced the Bharat 22 ETF on August 4. It includes 22 central public sector enterprise (CPSE) stocks from six sectors including three SUUTI stocks with 40% weightage within the index.

While Larsen & Turbo Ltd (L& T) has 17.1% weight age in the ETF, ITC Ltd and Axis Bank Ltd have 15.2% and 7.7% weightage, respectively.

“SUUTIs take sale will happen within and outside Bharat 22. It can even happen simultaneously. We don’ t see any problem there ,” a finance ministry official said speaking under condition of anonymity.

The Parliament bifurcated UTI in 2002, creating SUUTI and UTI Asset Management Co Pvt Ltd, the former holding the assured-return investment plans of UTI and the latter the marketlinked plans. The bifurcation took place after UTI’s US-64 investment plan ran into trouble.

SUUTI has minority stakes in 51 listed and unlisted companies, with most of its value locked in Axis Bank Ltd (11.53% stake ), IT C (9.17%), and L&T (4.2%).

The government in June raised ₹4,000 cr ore through sale of 2.5% stake in L&T. Earlier in November, it sold 1.63% in L&T, while in March 2014, it sold 9% stake in Axis Bank to raise ₹5,500 crore through block deals.

The government has set a target of raising ₹72,500 crore from disinvestment in 2017-18, including ₹15,000 crore from strategic asset sales and ₹11,000 cr ore from listing of five public sector insurers. So far this year, the government has raised around ₹10,000 crore through stake sales.

To accelerate strategic disinvestments in CPS Es, the Cabinet Committee on Economic Affairs (CCEA) last week mandated a panel headed by Jaitley to oversee the asset sale process. The panel—a so-called alternative mechanism—may also help the government raise more revenue from asset sales.

The government has so far shortlisted BEML Ltd, Scooters India Ltd and Pawan Hans Ltd and three units of the Steel Authority of India Ltd for strategic disinvestment this year. It is also moving towards privatising the national carrier Air India while retaining its national carrier status. Another ministerial panel headed by Jaitley is currently looking at ways to deal with the massive ₹55,000 crore debt accumulated by the airline before putting it out for sale.