Maruti Suzuki slumps; doubts on plant persist

Reuters Market Eye - Shares in Maruti Suzuki Ltd fall as much as 4.8 percent as doubts persist about the impact of the automaker's plan to source cars from a plant to be built by its parent Suzuki Motor Co<7269.T>.

Maruti Suzuki issued a statement specifying financial details in a filing to exchanges on Wednesday.

The plan has sparked opposition from large Indian investors who believe Maruti Suzuki would be better off if it made the cars itself.

"While management tried to explain how the deal doesn't hurt Maruti, no attempts were made to explain why this structure makes sense in the first place," Jefferies said in a note to clients on Friday.

 

Meanwhile, Nomura said Maruti's earnings could become more volatile as a result of the Gujarat plant.

(Reporting by Abhishek Vishnoi)