| On a high road
New Delhi, April 3: The share sale price for the second stage of selloff in Maruti Udyog has been fixed at Rs 230 per share, which will help the government mop up another Rs 800 crore when the initial public offering (IPO) is floated in June.
“The government has decided to charge a premium of Rs 220 on a face value of Rs 10,” banking sources said, adding the face value of the share might be halved. If the face value of the share is halved, “a single Maruti share would cost Rs 115,” said a banking source.
The government, which has a 45.4 per cent equity stake in the automaker, plans to divest 25 per cent, or 3.6 million shares, through the IPO.
Japan’s Suzuki Motor Corp holds a majority stake of 54.2 per cent in the country’s largest automaker which has an equity base of Rs 144 crore.
The long-delayed IPO of Maruti is a part of the country’s privatisation programme under which the government also proposes to sell two cash rich oil firms — Hindustan Petroleum Corporation and Bharat Petroleum Corporation.
“Of the 3.6 million equity — 60 per cent will be offered to mutual funds, financial institutions, venture capitalists, 15 per cent to companies and large investors and the remaining 25 per cent will be offered to the retail investors,” the official said.
Under an agreement between the government and Japanese auto major Suzuki Corp, the latter will buy the un-subscribed shares at Rs 2,300 a share. However, this price was on a face value of Rs 100 per share.
The IPO was first expected to be completed in March and later postponed to April-May and finally to June because of the time taken to finalise the prospectus.
The official said the IPO might be postponed again, for the third time, if the Gulf war extends and stock market remains depressed.
Maruti has a commanding 50.4 per cent of the car market owing to its dominance in the small car segment.
Maruti’s sales are expected to rebound in March, helped by the over 5 per cent price cut it announced after the government reduced the excise rate by 8 per cent in the budget.
Sales had dropped in February as buyers postponed purchases anticipating a tax cut in the budget.
For the first 11 months of 2002-03, the firm’s domestic vehicle sales fell 5.54 per cent to 2,87,755 units but exports tripled to 28,037 units.