The Hindu Business Line : ITC, L&T, Axis Bank stocks take a hit

Mumbai, May 8 Share prices of ITC, Larsen & Toubro, and Axis Bank fell on Thursday, partly on news that the Specified Undertaking of UTI may start the process of selling off its stake in these companies.

This dealt a double blow for these scrips, as stocks in the industry sectors to which they belong also came under selling pressure in a declining market. ITC, L&T and Axis Bank fell by between 3 per cent and 5 per cent on Thursday.

SUUTI, which is scheduled to be wound up by the end of the current fiscal, owns a stake of over 9 per cent in L&T, nearly 12 per cent in ITC, and over 27 per cent in Axis Bank. It would have to sell off these assets before that time.

SUUTI was formed when UTI’s flagship scheme, US-64, ran into trouble; UTI was split into UTI Asset Management Company, which got all the NAV-based schemes, and SUUTI, which got the large equity holdings, properties and assured return schemes.

FMCG major ITC suffered a loss of more than five per cent on Thursday on the bourses. The BSE FMCG index too fell by 2.60 per cent on Thursday. ITC shares closed at Rs 215.05 on the BSE, down by Rs 11.90. L&T shares closed down by 3.36 per cent, at Rs 2,886 while Axis Bank shares closed 4.83 per cent lower, at Rs 863.35.

The BSE Capital Goods index too fell by 1.95 per cent while Bankex index fell the maximum, by 2.90 per cent.

Should SUUTI sell its stakes in ITC, L&T and Axis Bank there is likely to be a change in the institutional shareholding pattern if the sale is not in favour of another domestic institution, said analysts.

The FII-holding in ITC stands at 14.02 per cent; in L&T at 16.61 per cent and in Axis Bank at 33.9 per cent; they would be very keen to acquire the SUUTI stakes, added analysts.

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