After offloading stakes in insurance companies, cash-strapped public sector banks are gearing up to raise money by diluting their stakes in mutual funds through initial public offerings.
The government, which announced a ₹2.11 lakh crore bailout for NPA-hit PSU banks, had instructed them to mop up capital by selling stakes in non-core assets before seeking financial support.
The seven public sector bank-sponsored mutual funds include Baroda Pioneer Mutual Fund, BOI Axa Mutual Fund, Canara Robeco Mutual Fund, IDBI Mutual Fund, SBI Mutual Fund, Union Mutual Fund and Principal (Punjab National Bank) Mutual Fund.
Some of these mutual funds have already sounded out investment banks to ascertain the market potential and prepare the groundwork for an IPO, said sources privy to the information.
