Gearing up: Maruti Udyog will add five more cars to its stable, including a diesel vehicle, over the next five years. “We will be able to offer a compact diesel car that will combine the latest technology with path-breaking looks. This car will be available by the end of 2006,” managing director Jagdish Khattar said at the 8th Auto Expo in New Delhi on Thursday. The company’s pavilion at the expo displays the Escudo SUV and the Solio, a vehicle specifically designed for the physically challenged. “We have decided to invest another Rs 2,718 crore by 2008,” Khattar added. The funds will be used to develop new models as well as upgrade existing ones. Also seen in the picture is director (marketing) K. Saito. Picture by Rajesh Kumar

New Delhi, Jan. 12: The government has raised Rs 1,567.60 crore by selling an 8 per cent stake in Maruti Udyog to eight public sector financial institutions and banks. Life Insurance Corporation, part of this group, picked up more than half of the 2.31 crore shares on offer.

The success of the divestment prompted the Centre to also sell in the next financial year the 10.24 per cent stake it is left with.

“LIC has been given 1.68 crore shares (5.8 per cent) at Rs 682 apiece against the cut-off at Rs 620,” finance minister P. Chidambaram said today after a meeting of the group of ministers on divestment took the decision on Maruti.

Chidambaram added that the government would go ahead with the sale of its remaining stake, some of which will also go to employees at the country’s largest car-maker. Twenty shares have been set aside for each staff.

LIC, which already owned 3.45 per cent of Maruti, will increase its stake to 9.26 per cent after the fresh acquisition.

“The average price at which the shares have been sold is Rs 678.24, a premium of 22.8 per cent on the six-month average, 12.30 per cent on the three-month average, 4.01 per cent on the 10-day average and 4.17 per cent of the last traded price of January 10,” Chidambaram said.

The State Bank of India was the second-most successful bidder, picking up 39 lakh shares at Rs 660. The Small Industries Development Bank of India (Sidbi) quoted the highest price of Rs 725; Corporation Bank offered Rs 690.

Other successful contenders in the fray were Exim Bank, which bid at Rs 680, Indian Bank at Rs 670, Union Bank of India at Rs 665 and State Bank of Patiala at Rs 660.

Though the government retained the right not to sell all the shares on offer, if the bids were not to its liking, it finally decided to palm off the entire lot of 2.31 crore shares.

“The department of heavy industries has said the residual shares in Maruti could be sold at a suitable time. The proposal will be considered in that manner,” Chidamabram said, while announcing the names of successful bidders.

He said Maruti employees would pay the average price of bids received today. “The Prime Minister has been consulted and he has approved 20 shares each for 3,609 employees of Maruti at the discovered price. The balance will remain with the government,” the minister said. Before today’s sale, the government held 18.24 per cent in Maruti.