The Indian government is holding off on selling part of its stake in Axis Bank Ltd. due to volatile market conditions, The Economic Times reported Oct. 6, citing market sources.

The government was initially planning to sell up to a 4% stake in Axis Bank by early November, but decided to delay the sale after the Department of Public Asset Management met with bankers. An investment banker with knowledge of the development said persistent selling in Indian equities and investors becoming more risk-averse contributed to the government's decision.

The government was expecting to raise about 70 billion rupees through the sale. It had been trying to divest the bulk of its stake in the bank for more than three years now, but weak stock performance and concerns over a hostile takeover delayed its plans.

Axis Bank had underperformed its private bank peers since 2016, with the bank's shares only climbing 25% while the Private Bank Nifty gained close to 60%. The government had last sold a 9% stake in Axis Bank in 2014.

As of Oct. 5, US$1 was equivalent to 74.03 Indian rupees.