Government plans to sell residual stake in Maruti within FY07: CNBC
23 October 2006
Now the government has decided on the price on the basis of the company's NSE closing price on 26 June, 2006, which was Rs926.10. On that basis, the money is expected to be raised should be around Rs2,700 crore.
But the government wants to put up a competitive bidding, so that it could get a higher price for its stake. The government hopes to raise more than Rs3,000 crore. For this, the government is expected to take the same route as it did in January 2006 by selling 8 per cent of its scheduled stake at a cost of around Rs1,800 crore.
But this will not be a stake sale to Suzuki. Instead it will be to FIIs and public institutions.
The department of disinvestment has been advised to structure this offer as a private placement to domestic banks and financial institutions. So the government is expecting the banks and financial institutions to quote higher prices by taking the same route.
Also, since the government has a mere 10.2-per cent stake left in that company, there will be no public issue or sale to the employees.