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UTI sells Nestle shares in block deal?

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MUMBAI, Aug. 23

UTI is believed to have sold around 12-15 lakh shares of Nestle (India) Ltd (NIL) today at a price of Rs 570 per share.

The deals amount to around 1.5 per cent equity of the FMCG major. Brokers said the trades consisted of several block deals on the BSE aggregating Rs 80-85 crore in the first hour of trading.

Another institution is also understood to have sold large quantities of Nestle shares today. Brokers said the Swiss Parent of Nestle is believed to be the purchaser of the shares.

UTI and Nestle officials were not available for comment.

Sources said UTI sold shares through three domestic broking firms and the buyer was a US-based foreign broking firm.

UTI has been offloading its equity holding in several companies. Last week the institution sold 9.5 per cent stake in Bajaj Hindusthan at a price of Rs 95 per share to the promoters in a negotiated deal. The mutual fund has also been actively participating in buybacks and open offers in a bid to unlock value from its large holdings.

Meanwhile, Nestle shares gained over seven per cent on the bourses on talks of sale by UTI. In today's trading, the share price of NIL closed at Rs 565.80, up 7.45 per cent, with a volume of 24.14 lakh shares on the BSE and on the NSE it closed at Rs 562, up 7.08 per cent, with a volume of 7.01 lakh shares. The active buying from the Nestle parent is believed to have led the stock price to a new 52-week high at Rs 573 on the BSE.

UTI has been continuously selling in NIL counter in the last one year. The shareholding pattern of NIL shows that the country's largest mutual fund holding fell from 7.85 per cent (75,66,432 shares) in September 2001 to 7.61 per cent (73,36,362 shares) in December 2001. By end of March 2002, UTI stake in NIL was down to 6.9 per cent (66,54,210) and by end of June 2002, its holding was at 6.01 per cent (57,91,105 shares).

Similarly, the holding of Nestle parent during the same period has gone up from 53.14 per cent to 53.98 per cent. The total paid-up capital of the company comprises 96.41 crore shares of face value Rs 10.

There has been talks in the market that NIL parent Nestle SA and Nestle Holdings Ltd have been buying the shares from the market through the creeping acquisition route in the last few days. In fact, the parent can increase its stake up to 64 per cent through the creeping acquisition route.

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