Banks Chosen To Sell Axis Bank Stake Government Intends To Act Soon
Axis bank is one of the leading private banks in India. This bank from its establishment offers wide range of services to the customers such as personal banking, corporate banking, NRI banking and many more.
January 23, 2014 (Newswire.com) - J M Financial Ltd, J P Morgan Chase & Co. and Citigroup Inc. are the three majors selected by India to support the sell of its Axis Bank Ltd. stake. The government stake amounts to $ 925 million in Axis Bank Ltd and it now intends to sell half of this stake to reduce the fiscal deficit.
Government targets to raise funds to reduce the fiscal deficit to 4.8 percent of GDP by March 2014 which was earlier 4.9 percent. The sources reveal that Government has decided to auction half of its 20.7 percent stake from Axis Bank that is third largest private sector bank of India. The stakes will be auctioned at the end of February, 2014. The target amount is $ 9 billion but till now the bank is able to generate only 3% of this amount. The above stated government stake in the bank is of 57 billion rupees which is calculated according to the current market price of the bank.
The news were floated from reliable sources but yet not confirmed by anybody from Citigroup, J M Financial or J P Morgan. The news was not even confirmed by anybody from the finance ministry. The slowed down in the country's economy and the slower tax payment has made government take this step. Again the increasing public expenditure has increased the fiscal deficit of the government.
The continuous increase in the fiscal deficit which already reached the 94% of total yearly target has built up pressure against the finance ministry. The ministry has checked various sources of alternative revenue and this is the result of one of these brainstorming sessions. Government also has its stake in many other private undertakings and current scenario will make government sell full or part of those stakes as well.
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