Government exits from Maruti, sells 10.27 per cent stake

New Delhi, May 10 (UNI) The government today exited Maruti Udyog Limited, selling its 10.27 per cent stake for Rs 2,360 crore to financial institutions led by country's largest insurer the Life Insurance Corporation (LIC).

''We have sold the entire shares held by the government in Maruti at an average price of Rs 797 a share to raise Rs 2,360 crore,'' Heavy Industries and Public Enterprises Minister Santosh Mohan Dev said.

The government had offered 2.96 crore shares in the company, representing 10.27 per cent stake. Of this, LIC got all the 1.3 crore shares it had bid for at a price of Rs 800 per share.

The country's biggest insurer, which earlier held 8.1 per cent, now controls 12.5 per cent and has become the second-largest shareholder in the company.

The shares would be transferred to LIC in September when the shareholders of Suzuki Motor Corporation, which owns the company, amend the Articles of Association.

Suzuki officials have already given a go-ahead to LIC, increasing its stake in the Maruti to over 10 per cent.

In all, 32 financial institutions and mutual funds were alloted shares. State Bank of India was the second most successful bidder and got 83 lakh shares at Rs 775 per share.

A total of 36 institutions and mutual funds had submitted financial bids for shares on offer but Franklin Templeton, SIDBI, Birla Sun Life and United India Insurance were not given any shares because of low bids.

The sale brings to an end the government's 23-year-long association with the car maker, in which it was a majority shareholder.

The government had given control to Japanese partner Suzuki and sold 25 per cent of its share to the public in 2003 at Rs 125 a share. Later in two tranches, it sold the remaining 18.27 per cent shares to financial institutions.

UNI