| Enthused by the oversubscription to its offer to sell its remaining 10.27 per cent equity in Maruti Udyog, the country’s largest car maker, the government hopes to raise around Rs 2,500 crore from the auction. The total number of bids received were for around 3,59,00,000 shares as against 2,96,79,709 shares on offer (1.21 times oversubscribed).
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| A finance ministry official said the auction process was likely to be completed tomorrow itself at a meeting of an empowered group of ministers, which is overseeing the sale. The Maruti scrip was trading at Rs 802.85 towards close of trade on the BSE, up from the previous close of Rs 800.
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| Financial bids for the shares, at a floor price of Rs 760, were deposited today by 36 of the 39 companies that expressed interest to participate in the auction. The highest bid of Rs 850 per share for a lot of 1,00,000 shares came in from the public sector Corporation Bank. The lowest bid of Rs 765 came from the Union Bank of India. As many as 20 public sector banks, insurance firms and mutual funds put in bids, along with private sector entities such as HDFC, among others. The State Bank of India and a couple of its associates, IDBI, GIC and Canara Bank also participated in the auction.
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| LIC, which already holds 8 per cent stake in MUL, has bid for 1,00,00,000 shares at Rs 800. If its bid is accepted in entirety, the company would bag another 3.47 per cent stake, thereby raising its total shareholding to 11.47 per cent. The auction has been designed in a manner that gives the highest bidder priority. Only those bids which are above Rs 10 crore will be considered for the oversubscribed portion.A decision on whether LIC will be allowed to own more than 10 per cent of MUL’s equity will be taken tomorrow at the ministers’ meeting.
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| At the time of inviting interest, the government had said that no institution should hold more than 10 per cent of the total paid-up capital of the company. However, it later decided to relax this condition on a case by case basis.
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| Suzuki now holds 54.2 per cent in MUL, while financial institutions hold about 35.5 per cent.
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| The decision to sell its remaining equity in MUL was cleared by the Cabinet Committee on Economic Affairs on December 21 last year.
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| Subsequently, on February 22 this year, the government invited expressions of interest for selling the shares. |
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