The Hindu Business Line : Govt to divest 8 pc in Maruti

REVIVING the disinvestment process, the Government today invited Expression of Interest (EoI) from domestic public sector financial institutions and public sector banks for picking up 8 per cent stake in the auto major, Maruti Udyog Ltd (MUL).

The sale is to be done through the competitive bidding process. The Government currently holds 18.28 per cent of equity in MUL.

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 the institution in Maruti and shares transferred from government to it should not exceed 10 per cent equity of MUL on the date of such transfer.

The Government decision to limit the sale to banks and FI may imply that no other class of investors might be allowed in this round of stake sale.

Going by the current price of Maruti's scrip on stock exchanges, the Government can raise around Rs 1,500 crore from the sale. The Maruti share ended the day at Rs 662.70 on the BSE against a previous close of Rs 657.75, while on the NSE the scrip closed at Rs 662.75 from the previous close of Rs 658.

The shares will be locked-in for six months from the date that the Government delivers shares to the demat account of the institution.

The successful bidder will have to pay the 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.

Financial institutions interested in participating in the process have been asked to register with the Department of Disinvestment. The last date for putting in an EoI is January 4 .

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.