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Home > Business > PTI > Report

Top global investors throng Maruti road-show

June 06, 2003 17:13 IST

Top global investors including Aeneas, Banyan, Merrill Lynch, GE Cap and Bernstein attended the second leg of Maruti Udyog's international road-show in New York where they discussed the carmaker's Rs 830 crore (Rs 8.30 billion) public offering.

Senior Maruti officials, including chairman S Nakanishi, managing director Jagdish Khattar and director (marketing and sales) K Saito, met the investors to woo them to the offering during the road-show, sources said.

The New York leg of the road-show took place over two days on June 4 and 5, they said.

On June 2, Maruti officials had met leading international institutions including Barings, Boyer Allen and GLG Partners in London during the first leg of the international road-show.

Merchant bankers in pre-marketing interactions earlier had approached some of these investors and they gave positive feedback on the issue, the sources said.

The road-shows will now proceed to other places, including Boston, Amsterdam, Singapore and Dubai, they added.

The Maruti officials briefed the investors about the development of the company as a R&D hub for Suzuki cars in Asia and the recent success of its Alto car in Europe and thrust on exports with this year's target set at 39,000 cars.

They also explained them about Maruti selling more cars than all its competitors put together even after the entry of 11 global players in the Indian market.

The Maruti officials informed the investors about the company posting a 40 per cent rise in net profit during 2002-03 at Rs 146.4 crore (Rs 1.464 billion) and increase in car sales since the second half of the last fiscal, sources said.

Besides, they briefed them about the company producing at over 100 per cent capacity while the rest of the car industry was producing at an average of only 58 per cent.

Maruti produces 350,000 cars annually, with the M-800 and other small cars like Zen, Alto and WagonR comprising majority of its sales.

The road-shows, including the two held on May 30 and 31 in Mumbai and Delhi, respectively, have been conducted to attract investors to the forthcoming public issue for offloading 25 per cent government stake in Maruti, a joint venture between the Government of India and Japanese automaker Suzuki Motor Company.

The government now holds 45.54 per cent stake in Maruti, while Suzuki has 54.2 per cent stake.

The IPO is for offloading 7.2 crore shares of Rs 5 each and the floor price has been set at Rs 115 per share. The offer opens for bidding on June 12 and closes on June 19.

Last year, the government ceded control of Maruti to Suzuki after a Rs 400 crore (Rs 4 billion) rights issue.

Suzuki acquired about four per cent equity in the company for about Rs 1,400 crore (Rs 14 billion) including a renunciation premium of Rs 1,000 crore (Rs 10 billion).

Under the deal, the government is required to exit the carmaker following a two-stage divestment process, involving a public offering of shares.

It proposes to shed 25 per cent equity in the first phase and another 20 per cent during the second phase by 2004.

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