The Hindu Business Line : 8 pc of Maruti fetches Rs 1,567 cr

Financial Daily from THE HINDU group of publications Friday, Jan 13, 2006

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Home Page - Cars
Industry & Economy - Disinvestment

8 pc of Maruti fetches Rs 1,567 cr — Average price at Rs 678.24 per share

Our Bureau

New Delhi , Jan. 12

THE Government has raised nearly Rs 1,567 crore from the divestment of 8 per cent of its stake in the auto major Maruti Udyog Ltd (MUL).

Bids from eight banks and financial institutions were accepted by the empowered group of ministers (e-GoM) at an average price of Rs 678.24 per share.

A total of 36 banks and FIs had bid for the shares.

Briefing newspersons after an e-GOM meeting that finalised the list of allottees , the Union Finance Minister, Mr P. Chidambaram, said the Government accepted bids from SIDBI, Corporation Bank, Life Insurance Corporation, Exim Bank, Indian Bank, Union Bank of India, State Bank of India, and State Bank of Patiala. The floor price for the MUL share had been set at Rs 620 for the offer.

Price range of bids: "The bids received were in the range of Rs 620 to Rs 725. We accepted the bids at the following prices - SIDBI at Rs 725 per share, Corporation Bank, Rs 690 per share, LIC at Rs 682 per share, Exim Bank at Rs 680 per share, Indian Bank at Rs 670 per share and Union Bank at Rs 665 per share. The bids of both State Bank of India and State Bank of Patiala were accepted at Rs 660 per share," the Finance Minister said.

4 pc premium: The Government has received a premium of more than 4 per cent of the last traded price of the Maruti share and a premium of more than 12 per cent of the three-month average price, the Minister added.

Life Insurance Corporation of India (LIC), which was allotted 1.68 crore shares, has been given the largest share of stocks being divested, followed by State Bank of India, which has been given more than 39.29 lakh shares.

The successful bidders will have to pay the bid amount within three working days of date of intimation by the Government and the shares will be delivered within five working days of receipt of funds.

Divesting residual share: The Minister added that the Government would also look at divesting its residual share in MUL.

"The decision will be considered in accordance with the laid-down procedures," Mr Chidambram said, when asked about the timing of the proposed sale. After the current round of divestment, the Government would be holding around 10.2 per cent in Maruti Udyog.

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.

Meanwhile, the Government has approved a proposal to offer 20 shares each to all 3,609 Maruti employees at a price of Rs 660 per share.