Govt mulls selling stake in Axis Bank

Formerly the UTI Bank, Axis Bank was officially incorporated as a private bank in 1993 after being promoted by several public sector insurance entities in India.

The bank has a large footprint of 2589 domestic branches (including extension counters) and 12,355 ATMs spread across the country.

It has a 5-year compounded annual growth rate of 21% in total assets and 24% in net profits.

Axis Bank is promoted by Union Trust of India, LIC, General Insurance Corporation, New India Assurance, Oriental Insurance Company and United India Insurance who collectively hold 29.9% of Axis Bank.

Domestic shareholders, including other Indian banks and Indian citizens collectively have 25.8% of Axis Bank's shares.

Foreign Institutional Investors and Foreign Portfolio Investors have the largest share, collectively accounting for 44.3%.

Under Arun Jaitley, the Finance Ministry has set stringent targets to reduce the country's fiscal deficit.

The government is seeking to meet an asset sale value target of $10.4 billion by 31 March 2016.

The Ministry has been able to raise approximately $2 billion toward the effort so far.

Through this, the government aims to reduce the budget deficit to 3.9% of the GDP.

Sources state that the Indian government is considering selling part of its stake in the nation's third-biggest private sector lender, Axis Bank.

Officials from the Ministry of Finance and Axis Bank were unavailable for comment on the matter.

The government holds a 11.6% share in Axis bank which, at the current market value is estimated to be worth approximately $1.7 billion.

Axis Bank shares fell 3.42% to Rs.416.05 on the Bombay Stock Exchange amid reports of the government's sale of part of its stake in the bank.

Axis Bank has an equity capital of Rs.475.79 crore with a face value of Rs.2 per share.

Axis Bank stocks hit a high of Rs.425 and a low of Rs.413.85 during the day.