Twenty-four public sector banks and a clutch of financial institutions (FIs) and mutual funds (MFs) are in race for the government’s residual 10.27% stake, worth over Rs 2,300 crore, in India’s largest carmaker, Maruti Udyog. The Cabinet cleared the disinvestment in December 2006 on condition that the stake is offloaded only in favour of banks, FIs or MFs.
Punjab National Bank, State Bank of Mysore, Central Bank of India, Canara Bank, Bank of India, IDBI, Bank of Baroda, Dena Bank and Punjab & Sind Bank are among the banks that are interested in the stake. Others that have thrown their hat in the ring include public sector FIs Oriental Insurance Co., General Insurance and New India Assurance, as well as HDFC, Reliance, Franklin Templeton and SBI MFs.
Maruti Udyog was established in 1981 by an Act of Parliament, and Suzuki was chosen 50% joint venture partner in October, 1982.
The government’s decision to cash out of Maruti is well timed. The company’s stock hit a 52-week high of Rs 991.4 on October 3 last year. On Monday, it closed at Rs 797.25, up 1.2%, on the BSE.
At current prices, the government’s mop up could be around Rs 2,366 crore, although that figure could be higher if it garners a premium over current prices. In January 2006, the government realised Rs 1,567 crore from the sale of 8% equity to banks and FIs at an average price of Rs 678.24 a share.
"The finance ministry will now decide on when to call in the bids in consultation with SBI Capital Markets and Kotak Mahindra, who are advisors to the transaction," an informed source said.
While Suzuki holds about 54.21% stake in Maruti (according to the holding structure on December 31, 2006), LIC has 8.02% and HSBC Global Investment Fund 3.07%.
Punjab National Bank, State Bank of Mysore, Central Bank of India, Canara Bank, Bank of India, IDBI, Bank of Baroda, Dena Bank and Punjab & Sind Bank are among the banks that are interested in the stake. Others that have thrown their hat in the ring include public sector FIs Oriental Insurance Co., General Insurance and New India Assurance, as well as HDFC, Reliance, Franklin Templeton and SBI MFs.
Maruti Udyog was established in 1981 by an Act of Parliament, and Suzuki was chosen 50% joint venture partner in October, 1982.
The government’s decision to cash out of Maruti is well timed. The company’s stock hit a 52-week high of Rs 991.4 on October 3 last year. On Monday, it closed at Rs 797.25, up 1.2%, on the BSE.
At current prices, the government’s mop up could be around Rs 2,366 crore, although that figure could be higher if it garners a premium over current prices. In January 2006, the government realised Rs 1,567 crore from the sale of 8% equity to banks and FIs at an average price of Rs 678.24 a share.
"The finance ministry will now decide on when to call in the bids in consultation with SBI Capital Markets and Kotak Mahindra, who are advisors to the transaction," an informed source said.
While Suzuki holds about 54.21% stake in Maruti (according to the holding structure on December 31, 2006), LIC has 8.02% and HSBC Global Investment Fund 3.07%.
No comments:
Post a Comment