The share sale in Axis Bank by the government on Thursday garnered more bids than shares on offer.

The 46.53 million offer for sale (OFS) received bids for 48.54 million shares from institutional investors, stock exchange data showed.

Most of the bids came at an indicative price of Rs 836, higher than the base price of Rs 830.6. About 4.6 million shares reserved for retail investors will be auctioned on Friday.

If there isn’t adequate demand from individual investors, the shares will be allotted to institutional investors. Through the share sale, the government will be able to mop up Rs 4,000 crore, which will go towards the disinvestment kitty. The shares of Axis Bank belonged to the Administrator of the Specified Undertaking of the Unit Trust of India (Suuti), which was created in 2002 after UTI's US-64 investment plan had unraveled.

Back then, UTI’s 27 per cent stake in Axis Bank was transferred to Suuti.

Over the years, the government divested this holding, with the last instance coming in May 2021, when it offloaded 56.6 million shares, or 1.9 per cent.

After the latest share sale, Suuti’s holding in Axis Bank will fall to zero. “Suuti’s sale of 1.55 per cent of shares could lead to Axis Bank trading lower in the short-term, especially since it comes hot on the heels of Bain's partial stake sale last week.

But with Suuti’s holding going to zero, this removes an overhang on the stock,” said insight provider Brian Freitas of Periscope Analytics who publishes on Smartkarma. Shares of Axis Bank 3.7 per cent to finish at Rs 841.4 on Thursday.

The private sector lender’s shares have risen more than 20 per cent this year. ICICI Securities, Citigroup Global Markets and Morgan Stanley India were the investment banks that handled the share sale.

The three banks were roped in by the government in 2016 to manage divestment of stakes held by Suuti.

Back then, the total market value of Suuti’s holdings was more than Rs 60,000 crore.