Maruti stake sale draws Rs 850 top bid

The bid prices range between Rs 765 and Rs 850, much above the floor price of Rs 760 set by the government, reports Gaurav Choudhury.

A clutch of major financial institutions and banks have shown interest in picking up the residual 10.27 per cent stake the government is offloading in the country’s largest car manufacturer Maruti Udyog through which it expects to mop up over Rs 2,200 crore.

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The bid prices range between Rs 765 and Rs 850, much above the floor price of Rs 760 set by the government. The highest bid was offered by Corporation Bank (Rs 850 per share), followed by public sector insurance behemoth Life Insurance Corporation (LIC), which had bid Rs 800 per share, sources said.

Japanese car major Suzuki Motor Corporation holds 54.2 per cent in Maruti Udyog, while Indian banks and financial institutions hold 35.5 per cent. The government holds the rest.

Sources indicated that 36 entities, including LIC, State Bank of India, Corporation Bank and Union Bank of India had submitted their bids. The bidding is aggressive with Suzuki agreeing to let LIC raise its stake beyond 10 per cent. The government had approached Suzuki after LIC’s stake in the company touched 8.1 per cent.

Expressions of interest for the sale of the residual government stake in Maruti Udyog were invited in February. The process, however, was delayed by a choppy stock market as well as the lack of clarity on LIC increasing its stake. LIC was the most aggressive bidder when the government divested 8 per cent stake in the company last year, where it acquired more than half of the shares on offer.