FP Staff Jan 27, 2014
Ajay Piramal-promoted Piramal Enterprise, which last month raked in Rs 8,900 crore by selling a 10 percent stake in Vodafone, is now looking at a proposal from investment bankers to pick up around 5 percent equity stake in private sector lender Axis Bank from Specified Undertaking of Unit Trust of India (SUUTI), the Business Standardreported today quoting unknown sources.
The Piramal Group is sitting on a massive cash pile. it had sold its domestic formulation business to Abbott Laboratories for around Rs 18,000 in 2010.
As per Axis' market capitalisation of Rs 56,640 crore, the value of a five percent stake is around Rs 2,800 crore. This stake buy in Axis Bank would give Piramal exposure to banking sector without getting tied to its regulatory norms.
Last week, Specified Undertaking of Unit Trust of India (SUUTI) chose JPMorgan Chase & Co, Citigroup Inc and JM Financial to help sell its 23.58 per cent stake in Axis Bank valued over Rs 13,000 crore.
The sale is part of a search for funds to narrow the government's fiscal deficit to 4.8 percent of gross domestic product in the financial year ending March 2014 from 4.9 per cent a year earlier.
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