Business Daily from THE HINDU group of publications
Thursday, May 10, 2007
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Business Daily from THE HINDU group of publications Thursday, May 10, 2007 ePaper |
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Cars Industry & Economy - Disinvestment
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Offer line Bids received for 35.9 m shares against 29.68 m shares on offer. Bidders include LIC, SBI, PNB, Union Bank of India and Corporation Bank. Govt's residual stake sale expected to fetch at least Rs 2,250 crore.
New Delhi May 9 The Government is all set to exit Maruti Udyog Ltd (MUL) with a Group of Ministers likely to finalise on Thursday the allotments for the sale of its 10.27 per cent residual stake in the country's largest car manufacturer. Japan's Suzuki Motor Corporation (SMC) currently holds 54.21 per cent stake in MUL while the Government held 10.27 per cent. The balance equity is with financial institutions and individuals. The residual stake sale by the Government is expected to fetch for it at least Rs 2,250 crore. In January last year, it had sold an 8 per cent stake in Maruti to eight Indian financial institutions and banks and mopped up Rs 1,567 crore. Official sources said that bids had been received for 35.9 million shares, nearly 1.21 times the 29.68 million shares on offer for sale. The floor price has been pegged at Rs 760 per share. "We will place our recommendations before the Group of Ministers tomorrow, which will take a final decision on the allotments," a Government official said.
Bids received
As many as 36 bids, including the ones from large State-owned financial institutions, and banks and private sector banks and mutual funds have been received. The bidders include Life Insurance Corporation, Corporation Bank, State Bank of India, Punjab National Bank and Union Bank of India. While Corporation Bank has made the highest bid at Rs 850 per share (for 1 lakh shares), Life Insurance Corporation has bid for 1 crore shares at Rs 800 per share. LIC currently holds 8.10 per cent stake in MUL. The allottees would be decided under a French auction method, wherein the highest bidder (in terms of price) would get priority on the number of shares to be acquired, followed by others as per the order of their bid price. Even if one were to go by the floor price of Rs 760 per share, the Government is expected to realise at least Rs 2,250 crore from the stake sale. For the financial year 2006-07, Maruti reported a net profit of Rs 1,561.98 crore on a total income of Rs 15,252.30 crore. Maruti's shares opened at the National Stock Exchange on Wednesday at Rs 801 and closed at Rs 802.30. The counter saw an intra-day high of Rs 814.45 and a intra-day low of Rs 791.10.
Related Stories: More Stories on : Cars | Disinvestment | Maruti Udyog Ltd
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