Dec 21, 2006

Govt decides to exit from Maruti

The Cabinet on Thursday approved the sell of residual 10.27 per cent stake held by the Govt in Maruti Udyog Ltd.
In the second such exercise this year, the Cabinet Committee on Economic Affairs gave the go-ahead to the sale of Govt's remaining 2,96,79,689 shares (as on September 31, 2006) in Maruti.
The stake will be sold to banks and financial institutions and bids are expected soon, said Finance Minister P Chidambaram.
The stake at current market price is expected to fetch the exchequer over Rs 2,700 crore.

With the sale of the stake, Govt will completely exit from auto major Maruti, while Japan's Suzuki Motor Corp will continue with its majority holding of 54.2 per cent.Thursday's decision marks the end of Govt's gradual withdrawal from the auto major, which commands a staggering over 50 per cent share in the Indian car market.
Maruti Udyog Limited (MUL) was established in February 1981 through an Act of Parliament, to meet the growing demand of a personal mode of transport caused by the lack of an efficient public transport system.

In January this year also the Govt had mopped up Rs 1,567 crore from sale of eight per cent equity in the car major to banks and financial institutions at an average price of Rs 678.24 share.
The record levels of Sensex have ensured that it gets around double that amount from its remaining 10.27 per cent stake as the stock price has risen over 35 per cent from the sale price in January.
Maruti shares were trading at Rs 940, up 1.84 per cent, in late afternoon on the BSE on Thursday.

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