An aggressive bidding war could erupt for the government’s residual stake in car maker Maruti, with the company’s current owner Suzuki understood to have agreed to LIC of India Ltd raising its stake beyond 10%. “Suzuki Motor Corporation has told the Indian government in reply to a letter that it has no objection to LIC’s stake in Maruti going beyond 10%,” a source said. Suzuki was approached as LIC’s stake in the company had already touched 8.1%. The agreement with Suzuki during the earlier round of disinvestment had made it mandatory on the government’s part to ensure that in the stake sale, share of no institution should cross 10%.
As the state-owned insurance company was the most aggressive bidder when government off-loaded 8% stake in the company in January 2006, the government wanted it to bid in this round of disinvestment too.
During the previous sale, LIC had cornered 1.68 crore shares of the company, amounting to 5% stake. The government has already invited Expressions of Interest for the remaining 10.27% stake in Maruti and 22 financial institutions and mutual funds have put in their applications.
As the state-owned insurance company was the most aggressive bidder when government off-loaded 8% stake in the company in January 2006, the government wanted it to bid in this round of disinvestment too.
During the previous sale, LIC had cornered 1.68 crore shares of the company, amounting to 5% stake. The government has already invited Expressions of Interest for the remaining 10.27% stake in Maruti and 22 financial institutions and mutual funds have put in their applications.
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