The Hindu Business Line : Maruti divestment floor price set at Rs 620

THE empowered Group of Ministers (e-GoM) on Thursday fixed a floor price of Rs 620 per share for the disinvestment of an 8 per cent stake in Maruti Udyog Ltd, a move that is expected to garner more than Rs 1,400 crore.

The cut-off date for accepting financial bids has been fixed as January 11 and a final decision on the sale is expected soon thereafter. The disinvestment offer has attracted Expression of Interest from 36 entities.

The Government currently holds an 18.28 per cent of equity in Maruti. It had stipulated that only domestic public sector financial institutions and public sector banks were eligible for putting in an EoI for picking up the stake in MUL. The sale is to be carried out through competitive bidding.

The Chairman and Managing Director, Bank of India, Mr M. Balachandran, on Thursday confirmed that the bank had put in a bid for picking up a stake in Maruti.

Among the other entities that are said to have shown an interest in participating in the disinvestment process are Bank of Baroda, Punjab National Bank, Canara Bank and Life Insurance Corporation (LIC).

The Maruti share ended the day at Rs 672.30 on the BSE, while on the NSE, the scrip closed at Rs 670.80. The minimum bid value has been fixed at Rs 10 crore and the maximum bid size is 2,31,12,804 shares (which is the number of shares being divested). However, the Government has said that the present holding of any bidding entity in Maruti and shares transferred from Government to it should not exceed 10 per cent equity of MUL on the date of such transfer.

SBI Capital Markets Ltd and Kotak Mahindra Capital Company Ltd have been jointly appointed as advisors.

In June 2003, the Government sold a 27.5 per cent stake in MUL to the public at a price of Rs 125 per share and mopped up Rs 993 crore.

Before that, the Government had held a 45.8 per cent stake in MUL, comprising 13.23 crore shares of Rs 5 each.