The government of India is keen on offloading its remaining stake in Maruti Udyog.
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It currently has an 18.24% stake in Maruti after earlier reducing its holding in India’s largest car manufacturer in two stages – first to Suzuki and then through an initial public offering (IPO) when it offered 25% of the shares to the public.
Since taking power recently, the new government has not been open to disinvestment. In fact, the disinvestment policies followed by the previous government were heavily altered by the current regime and it had been assumed the government would not sell its Maruti Udyog stake.
However, India’s stock markets have been buoyant in recent times and the government now thinks that this is the right time to offload its remaining stock. Maruti had offered its stock at INR 110 at the time of the IPO and it is currently being traded at INR 550.
With such an increase in share prices, the government is inclined to offload its remaining shares before the end of the financial year. The disinvestment would be done through public issue in order to ensure greater public participation.
The current value of government’s holding in Maruti is INR 24 billion and it is not yet clear if the government will offload its complete stake.
Deepesh Rathore / Tilak Swarup
