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Foreign funds chase Maruti

Calcutta, June 17: Around 40 foreign institutional investors have queued up to secure a significant stake in Maruti Udyog. A couple of them have bid for two crore shares each, said merchant bankers managing the initial public offering.

The Maruti IPO of 7.22 crore shares has already been oversubscribed nearly eight times. The government has indicated that it might increase the issue size by 10 per cent or 72.2 lakh shares to retain part of the over-subscription. The decision to do so will be communicated, if at all, to the public after the issue closes on June 19.

Merchant bankers said institutional bidders had already oversubscribed six to seven times. Sixty per cent of the issue or around 4.33 crore shares are reserved for institutional bidders, including foreign investors.

Some of the institutions have bid for the shares at Rs 360, though most of the bids have come in the range of Rs 115-125. (The floor price for the auction is Rs 115.) However, observers say most of these outrageous bids are likely to be withdrawn or changed.

The government decided to reserve 25 per cent of the issue for retail investors. Sources said around 40,000 applications have so far been received.

A number of banks and finance companies are funding retail investors to subscribe to the issue. Most of the retail applications are expected to come over the next couple of days.

Bids for nearly 56 crore shares have so far been received on the National and Bombay stock exchanges. Post IPO, the shares of Maruti Udyog will be listed on these two bourses.

The shares will be listed within a fortnight from the close of issue. The market expects the shares to debut at a premium to the floor price.

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