Mumbai/New Delhi: India sold a stake in ITC Ltd., Asia’s second-biggest listed tobacco company, to government-owned Life Insurance Corp. of India for about Rs6,690 crores as it seeks to meet the year’s divestment target, people with knowledge of the matter said.

The government’s Specified Undertaking of the Unit Trust of India sold ITC shares at about Rs275.85 apiece, according to the people, who asked not to be identified because the information is private. The price represents about a 0.3% discount to Monday’s close. Neeraj Gupta, India’s secretary of the Department of Investment and Public Asset Management, said by phone that the government sold about 2% of ITC through a block trade.

India raised about Rs6,700 crores from the sale, which was priced around Monday’s close, Gupta said. He didn’t identify the buyer or the exact price per share.

Before the sale, Prime Minister Narendra Modi’s administration was still more than Rs10,000 crores away from meeting this year’s divestment target of Rs45,500 crores. The government had already lowered the projection from an earlier goal of Rs56,500 crores.

“The federal government is sending a strong signal to the market that it is serious about disinvestment targets for the year," Arun Kejriwal, founder of advisory firm Kejriwal Research & Investment Services Pvt., said by phone on Tuesday.

Citigroup Inc., Morgan Stanley and ICICI Securities Ltd advised the government on the share sale, the people said. D.S. Malik, a spokesman for the India Finance Ministry, and a representative for LIC declined to comment. ET Now reported earlier on Tuesday that LIC bought the ITC stake, citing unidentified people. Bloomberg

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