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Cabinet Committee on Economic Affairs(CCEA) today approved the disinvestment of Government equity in Maruti Udyog Limited (MUL) as per the following:
(i) Sale of 8% Government owned equity in MUL, leaving a balance stake of 10.28% Government owned equity in MUL.
(ii) Sale of this 8% equity to the public sector Financial Institutions (including public sector banks) through competitive bidding, with the market price as the benchmark.
(iii) Appointment of Advisor(s) to advise and assist in the proposed sale transactions.
The unlocking of amount from non-strategic investment would thus mobilize resources so as to be utilized by the Government in sectors that require attention on priority.
In May 2003, the Government held 13.23 crore shares of Rs.5 each (constituting 45.8% of the equity of MUL). In June 2003, Government sold 7.94 crore shares (constituting 27.5% of equity shares of MUL) in the domestic market through an Initial Public Offering (IPO). The sale was done as per the terms of the Revised Joint Venture Agreement on May 15, 2002 between Suzuki Motor Corporation and the Government. The sale price per share was Rs.125/- and total amount obtained was Rs.993 crore. The Government now holds residual shares of 18.28% of the total equity of MUL, i.e. a holding of 5,28,24,020 shares of face value of Rs.5/- each.
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