New Delhi, Jan. 31: The disinvestment ministry has said the only selloff it can complete by the end of this fiscal will be that of Maruti Udyog Ltd (MUL).
The initial public offering (IPO) of Maruti Udyog, which will be concluded by the middle of March, is expected is expected to bring in about Rs 700 crore, top ministry officials said.
Disinvestment secretary Pradeep Baijal said, “I feel in the current financial year we can complete only the Maruti selloff.” He was responding to questions about how many companies his ministry expected to sell off in the remaining two months of the current financial year.
The public issue will be the second stage of disinvestment in MUL where the joint venture partner Suzuki Motor Corporation (SMC) had agreed to give an underwriting of Rs 2300 a share as part of the agreement and government had decided to offer 25 per cent equity by March 2003 through an IPO. The remaining is to be sold in the next financial year.
The government has already mopped up Rs 1,000 crore from the first phase of disinvestment in Maruti through a rights issue. It expects to realise another Rs 1,400 crore, said Baijal.
“The expected Rs 1,400 crore would be spread over the next two stages of disinvestment in MUL,” said Baijal.
Baijal said the government expects to mop up Rs 700-800 crore from the forthcoming IPO. The disinvestment ministry expects to conclude the Maruti IPO by March 17, he said.
In May last year, Suzuki Motor Corp (SMC) had ratified the disinvestment deal of Maruti Udyog Limited and presented the government with a cheque of Rs 1000 crore to move into the driving seat of the largest car maker in the country.
The MUL selloff was planned under a two-stage process: the first was through a reduction of its stake in the car venture to 45.4 per cent from 49.7 per cent by not subscribing to a Rs 400-crore rights issue, for which it charged a control premium of Rs 1000 crore as this would give Suzuki Motor a majority stake in the joint venture.
The payment of the ‘control premium’ was the first step in the convoluted process of privatising the automaker which has a 59 per cent market share.