Feb 14, 2006 04:40 PM
6359 Views
(Updated Feb 14, 2006 04:40 PM)
MUMBAI: Last year, the government had taken a decision to divest the equity holdings controlled by UTI-I in NSE and National Securities Depository (NSDL), domestic financial institutions and banks.
The aim was to ensure that the controlling interest in institutions, which are perceived to be critical to India’s financial sector interests, remains with local institutional investors only. Another strategic holding in IL&FS is about to be fully transferred to Life Insurance Corporation (LIC). LIC has already bought SUUTI’s 15per cent stake and has sought Irda’s permission to buy an additional 10per cent.
The proceeds from the sale of these block holdings will go to the government which will utilise it for the future redemption of the tax-free bonds issued by the sovereign to investors of the erstwhile UTI. Bonds aggregating Rs 14,500 crore are due for redemption in ‘08-09 and the government intends to use the proceeds of the sale of UTI-I’s holdings only for fulfilling its obligations, and thus avoid a hump in repayments in ‘08-09 fiscal.
PANKAJ GADIYA
