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Govt to stick to rights issue route for Maruti selloff

The government said on Wednesday that it would follow the rights issue route to divest stake in car-maker Maruti Udyog Ltd.

"The decision for the rights issue was taken at the beginning and we are going to stick to it. We are thinking in the direction of valuation of the government stake in MUL," Heavy Industries and Public Enterprises Minister Manohar Joshi said on the sidelines of the Society of Indian Automobile Manufacturers annual convention.

The minister discounted reports that government would follow the equity route by allowing Suzuki Motors of Japan to hike its stake through preferential allotment of shares.

The government currently holds 49.7 per cent stake in MUL, while 50 per cent is held by Suzuki and the remaining by the employees.

"MUL divestment is going to be through rights issue. And there is no difference of opinion among the Department of Divestment, Finance Ministry and Heavy Industries Ministry on the issue," Joshi said adding that Suzuki was not creating any hurdles in the process of divestment.

"We are going to stick to FIs proposal. There is no change in that. It will be taken up in a Cabinet meeting shortly", he said but added that in case the FIs were not interested the process could take some time.

The minister also declined to give a timeframe with regard to divestment in MUL.

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