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Centre to sell 8% in Maruti
...but wait a minute, only PSU banks and FIs will get to move in.
BY A CORRESPONDENT
3 September, 2005: The Centre is planning to sell a part of its stake in Maruti Udyog Ltd in an attempt to mop up resources for its job guarantee and food-for-work schemes. The stake sale will be through competitive bidding.
The decision to part-sell the stake in Maruti was announced by defence minister Pranab Mukherjee after a cabinet meeting in New Delhi. The government expects to mop up about Rs 900 crore from the stake sale.
Maruti is 54.2% owned by Suzuki Motor Corporation. The Japanese giant came to hold majority in the company promoted by the Indian government after divestment of a substantial stake in the company in 2003. The government now holds 18.2% stake in Maruti, of which it will sell 8% to raise resources.
The stake will not be sold to private entities, but public sector banks and financial institutions. The coalition government at the centre hopes the stake sale can be expedited this way, since the Communist parties which support the Union government are dead set against divesting any stake through strategic sale or in the capital market.
The centre will not use the resources raised to bridge the fiscal deficit. It will used only for the priority sector.
"We will wait for the stake to fetch the maximum price," Mukherjee said. No time limit has been set to complete the divestment process. The government will soon appoint an agency to advise it on the stake sale.
BY A CORRESPONDENT
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