Specified Undertaking of Unit Trust of India (SUUTI) and Disinvestment targets

Market appetite for such large fund-raising remains uncertain

The government faces an uphill task in meeting its disinvestment target of Rs.565 billion for 2016-17. Having failed to raise the targeted amount through stake sale in PSUs for the last six years and in view of the current low valuations of a majority of PSUs , the government has decided to liquidate its stake in private companies, held through SUUTI. Recently, the Specified Undertaking of Unit Trust of India (SUUTI) put out a notification (RFP) inviting merchant bankers to bid for a mandate to sell its stake in 51 companies. As per media reports, the government will sell SUUTI’s holdings in two to three tranches. The companies include big-ticket names like Ultratech cement, Axis Bank, ITC, Bharat Petroleum, L&T, Hindustan Unilever and Reliance Industries. SUUTI was formed by the restructuring of the erstwhile Unit Trust of India (UTI) into UTI Trustee Company and SUUTI. It came into effect in February 2003, on the passing of the Unit Trust of India (Transfer of Undertaking and Repeal) Act of 2002. Source: Economic Outlook Article

• Department of Investment and Public Asset Management (DIPAM) was established for management of investment in CPSEs and oversee stake-sale process.
• SUUTI was formed in 2003 as an offshoot of erstwhile Unit Trust of India (UTI)