Shares of Axis Bank plunged as much as 3% in early trade on Thursday, a day after the private lender announced that the government will sell its entire 1.55% stake in the bank. Through the sale, the government is planning to completely exit the private lender.
On Thursday, shares of Axis Bank opened lower at ₹846 as compared to its previous closing price of ₹874 on the BSE. During the session so far, shares of Axis Bank plunged up to 3.31% at ₹845 . The market capitalisation of the private lender slipped to ₹2.6 lakh crore. During the initial two hours of trade, as many as 2.19 lakh shares changed hands in the Bombay Stock Exchange (BSE) as against the two-week average volume of 49.58 lakh shares. In the past three months, the shares of Axis Bank have surged 14.79%. The private lender hit the 52-week high at ₹919 on October 27 this year, and the 52-week low at ₹619 on June 23 this year.
On Thursday, the BSE Sensex opened 0.8% lower at 60,524 as against its previous closing of 61,033. In the first hour of trade, it has declined 403 points or 0.66% at 60,630.
As per the stock exchange filing, the specified undertaking of the unit trust of India (SUUTI), under the government of India, will sell 4,65,34,503 equity shares or 1.55% stake in the private lender. The government is planning to raise ₹4,000 crore through the share sale. The offer shall take place on a separate window of the stock exchanges on November 10, 2022 i.e. “T” day and November 11, 2022, which is “T+1” day. Only non-retail investors shall be allowed to place their bids on T day, whereas both retail and non-retail investors shall be allowed to place their bids on “T+1” day.
The non-retail investors shall have the option to carry forward their unallocated bids from T day to T+1 day provided such non-retail investors choosing to carry forward their unallocated bids to T+1 day are required to indicate their willingness to carry forward their unallocated bids.
“A minimum of 25% of the offer shares shall be reserved for mutual funds and insurance companies, subject to receipt of valid bids at or above the floor price. In the event of any under subscription by Mutual Funds and insurance companies, the unsubscribed portion shall be available to other bidders in the non-retail category,” the private lender said in a statement. The government has placed the floor price for the offer sale at ₹830.63 per equity shares.
Notably, in May last year, the government sold its 1.95% stake in Axis Bank through SUUTI for ₹4,000 crore.