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Rediff.com  » Business » Government decides to step out of Maruti

Government decides to step out of Maruti

April 28, 2007 03:26 IST
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The government has decided to disinvest its remaining stake in Maruti Udyog Limted, the country's biggest car maker, by May this year.

"The expressions of interest have come. We have to complete it (the share sale) by mid-May. Financial bids will be called soon," a senior government official said on Friday.

Finance Minister P Chidambaram and Heavy Industry Minister Santosh Mohan Dev on Friday held discussions on the sale of the government's 10.27 per cent residual stake in the auto major.

"The floor price has not yet been finalised. Experts will determine the price and time," Dev said, adding that another meeting will be held on the issue soon.

Sources said the government hoped to get a premium over the current market price of Maruti. The Maruti share price closed at Rs 795 on Friday on the Bombay Stock Exchange. Maruti share price at the end of Thursday's trading was Rs 796.85.

The decision to disinvest (the third and final sale of the government's stake) in MUL was cleared by the Cabinet Committee on Economic Affairs on December 21 last year.

The government was to sell 296,79,709 shares of Rs 5 each through competitive bidding and expected to raise between Rs 2,400 crore and Rs 2,800 crore.

On February 22 this year, the government had invited an expression of interest for competitive bids. It had offered to sell all or part of its shareholding in MUL to the Indian public sector financial institutions, public sector banks and Indian mutual funds.

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