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Maruti IPO success because of Suzuki partnership: Shourie
Thursday, 10 July 2003, 19:30 IST
NEW DELHI: The success of Maruti Udyog Ltd.'s initial public offer (IPO) was in part due to its strategic partnership with Japanese major Suzuki Motor Corporation, Disinvestment Minister Arun Shourie said here Wednesday.
"In the case of Maruti, there was a strong strategic partner (with Suzuki) with 54 percent stake and management control, a fact that generated faith in investors that the company will not be run in the culture of government-controlled companies," said Shourie.
The Indian government is divesting 25 percent of its 45.8 percent stake in Maruti through the IPO.
Suzuki Motor took management control of Maruti from the Indian government in May 2002, as part of the latter's privatisation programme. The Japanese auto major holds a majority 54.2 percent stake.
"Having a strong strategic partner generates strong market response," said Shourie.
He was speaking on the sidelines of a function to mark a tie-up between the Indian Railway's telecom wing, RailTel Corporation, and state-owned Bharat Sanchar Nigam Ltd. to share telecom infrastructure across the country.
In Maruti's case, the IPO was subscribed several times over within days and there was good response from the public to shares priced at 
125.
On the first day of listing on the Indian stock exchange Wednesday, Maruti shares were being traded at 168.
Shourie, however, indicated the IPO route would not be the preferred choice for future privatisation schemes.
On Thursday, the Cabinet Committee on Disinvestment will take stock of developments on the Maruti front even as it studies the case for privatization of four state-owned companies -- Hindustan Copper Ltd, Hindustan Organic, Dredging Corporation and National Fertiliser Ltd.
In the case of Hindustan Organics, with the spadework having been completed, the cabinet committee is expected to take a decision on calling bids for its sale.
Source: IANS
125.
On the first day of listing on the Indian stock exchange Wednesday, Maruti shares were being traded at 168.
Shourie, however, indicated the IPO route would not be the preferred choice for future privatisation schemes.
On Thursday, the Cabinet Committee on Disinvestment will take stock of developments on the Maruti front even as it studies the case for privatization of four state-owned companies -- Hindustan Copper Ltd, Hindustan Organic, Dredging Corporation and National Fertiliser Ltd.
In the case of Hindustan Organics, with the spadework having been completed, the cabinet committee is expected to take a decision on calling bids for its sale.
Source: IANS