New Delhi, Sept. 2
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 Rs 513, the sale of eight per cent stake will fetch Rs 1,092.69 crore to the Centre.
This move is unlikely to draw flak from the Left parties, as it had happened in the case of disinvestment of Bharat Heavy Electricals Ltd, since the Government had given up controlling interest in MUL in 2002, when the National Democratic Alliance was in power.
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, Mr Pranab Mukherjee, said eight per cent stake would be sold to the public sector financial institutions through competitive bidding with the market price as the benchmark. Mr 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. However, company sources said Suzuki is unlikely to raise any objection because the stake is not being offloaded to any automobile company. Incidentally, Suzuki had given its consent when the Government sold its stake through an IPO in 2003.
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.
The Minister for Heavy Industries and Public Sector Enterprises, Mr 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.
Reacting to the CCEA decision, the CPI (M) said it was open to the sale of residual stake in already privatised PSUs. CPI (M) Polit Bureau member Mr Sitaram Yechuri said, "The Government has no control over these companies but there money is stuck there. Sale of residual stake in already privatised PSUs is an insignificant matter."