IMG to meet on Fri for Maruti share pricing

The price and distribution of shares that the Indian government is selling in the country's largest carmaker through a public issue will be decided by a panel that will meet on Friday, the divestment minister said.

The Indian government is reducing its stake in Maruti Udyog Ltd to 20.8 per cent from 45.8 per cent through the offering in which the final price per share will be determined through competitive bidding from Rs115 as the floor price

It could retain extra bids for shares amounting to an additional 2.5 per cent stake.

The issue opened on June 12 and closes on Thursday.

"The inter-ministerial group will meet on Friday to decide on the advisor's recommendation on price and allotment of shares to applicants," Divestment Minister Arun Shourie told reporters on Thursday.

The inter-ministerial group consists of officials from the divestment, heavy industry, finance and law ministries and its decisions are forwarded to a panel of ministers.

Japan's Suzuki Motor Corporation, the majority owner in Maruti with a 54.2 per cent stake, has underwritten the entire offer.

Shourie said the government was working swiftly to get the shares listed on the stock exchanges.

Under the market regulator's guidelines, shares must be alloted to investors within 15 working days of an offer's close.

A senior divestment ministry official told Reuters that 60 per cent of the shares on offer would be alloted to financial institutions, 25 per cent to small investors and the rest to high net-worth individuals.

The issue already been oversubscribed nearly seven times, according to the Bombay Stock Exchange's Web site, www.bseindia.com.

Shourie said the government had been overwhelmed by the response to Maruti's offering of shares, including from small investors.

"The response shows that retail investors are enthused when there is a strong strategic partner," said Shourie.

More than half the 542,000 new cars sold in the past year to March were Maruti's models.

The public offer is part of the government's drive to raise Rs 13, 200 crore (Rs 132 billion) this year by selling stakes in state-run firms.