FIIs to take government''s eight per cent stake in Maruti
Our Corporate Bureau
03 September 2005
New Delhi: The Government has decided to offload eight per cent stake in Maruti Udyog Ltd (MUL) to public sector financial institutions. At the current market price of Rs513, the sale of the stake will fetch Rs1,092.69 crore to the centre. The government currently holds 18.28 per cent stake in MUL, which will come down to 10.28 per cent after the sale.
The decision to offload eight per cent stake was taken at the meeting of the cabinet committee on economic affairs (CCEA) here on Friday.
Briefing reporters after the meeting, the Defence minister, Pranab Mukherjee, said the eight per cent stake would be sold to the public sector financial institutions through competitive bidding with the market price as the benchmark. Mukherjee, however, did not give any timeframe for the sale saying such a move does not have any specific time as the shares would be sold when the market is bullish.
Japanese automobile major Suzuki Motor Corporation, which holds controlling stake in Maruti, officially has the first right of refusal when the Government sells its stake in MUL.
Minister for heavy industries and public sector enterprises Santosh Mohan Deb told reporters that the sale proceeds from Maruti would be utilised for the 'national investment fund' and the 'national rural employment guarantee scheme' that was approved by parliament in the recently concluded monsoon session.