SUUTI won't participate in Axis Bank pref issue

The Special Undertaking of Unit Trust of India (SUUTI), which was carved out of the erstwhile Unit Trust of India in 2003, will not participate in the proposed preferential offer of Axis Bank (formerly UTI Bank). The shareholding of SUUTI in the bank will come down from 27.02 per cent to 22.54 per cent.

The other promoters are Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC) and the other four general public sector companies — New India Assurance, United India, Oriental and National Insurance. Axis Bank is likely to raise around Rs 5,000 crore by issuing 71.4 million shares through preferential allotment, private placement, including qualified institutional placements, and private offerings through global depository receipts from domestic and international markets. The bank will close the offer within 15 days of passing the resolution.

According to a source, there is an issue of lock-in period if the undertaking participates in the offer. The shares may be locked in for a minimum two years, if SUUTI takes part in the issue. In Budget 2008-09, the government granted SUUTI five more years of exemption from liquidating state liabilities.