Maruti Suzuki India will finally go ahead tomorrow with its much-delayed minority shareholders voting to let parent Suzuki invest and own the upcoming plant in Gujarat.
The voting through postal ballot would take place from November 16 to December 15 while the results will be announced on December 17.
In order to reach out to the investors, the company organised several road shows at various locations, including Mumbai, Singapore, Hong Kong and the UK.
The Gujarat plant was initially planned to be operationalised in May 2017 but the company may be able to advance it by a couple of months.
Next year, the company’s Gurgaon and Manesar plants will be more than fully utilised and it would require capacity from Gujarat to meet demand.
Initially, the Gujarat plant was proposed to be owned by Maruti Suzuki but the plan was changed later with its Japanese parent Suzuki Motor Corporation announcing in January last year that it would invest $488 million to build the Gujarat plant.
Last year, under pressure from institutional investors, Maruti Suzuki had decided to seek minority shareholders’ approval after tweaking some of the earlier proposals for the controversial Gujarat plant, which it had initially planned to set up on its own.
The change was, however, opposed by institutional investors forcing the company to seek minority shareholders’ approval on the matter. They had even approached markets regulator SEBI seeking its intervention to safeguard the interests of minority shareholders.
Private sector mutual funds and insurance companies, which own almost 7 per cent of the company, led the opposition.
Subsequently, MSI decided to seek minority shareholder’s nod. However, the voting was delayed due to changes in regulations and MSI deciding to comply with requirements under the amended Companies Act.
The Gujarat plant is envisaged to have an installed capacity of 7.5 lakh units annually. MSI’s two units at Gurgaon and Manesar have a total production capacity of 1.5 million units annually.