BOI Looks to Raise 626 cr with STCI Finance Stake Sale
Mumbai: State-owned Bank of India plans to raise at least ₹ 626 crorebysellingits30%stakeinSTCI Finance, a move aimed at raising capital to grow its balance sheet. The bank, which had reported losses for the past two financial years, is looking to sell its non-core assets toboost its capital. The bank hasputontheblockitsstakeandhas fixed August 22 as last day for bidding. It has indicated that a meeting for the prospective bidders with the management of STCI Finance will be arranged on August 14.
Bank of India has set a floor price of ₹ 550 per share for its 1.13 crore shares. STCI Finance is a systemically important finance company which was originally owned by the Reserve Bank of India as a primary dealership company. Bank of India acquired majority stake in it from RBI and then expanded into a finance company.
STCI Finance is a non-deposit taking finance company in which PSU banks own 78% stake. This 78% includes Bank of India’s 30% stake; of the 22% balance, 15% is with other institutions while insurance companies hold 7%.
The central bank had divested its entire shareholding in STCI in two stages. In 1997, it reduced its stake from 50% to 14.4%, and then sold the rest in 2002 to the existing shareholders. In April 2006, STCI took over UTI Securities Limited from Specified Undertaking of Unit Trust of India (SUUTI). In 2007, it hived off primary dealership as a separate 100% subsidiary.