The government on Saturday approved a price of Rs 125 per share for divestment of its 25 per cent stake in car major Maruti Udyog Ltd.
Divestment Minister Arun Shourie said at a press conference in New Delhi that the ratio of allocation of shares has been revised to 60 per cent for individuals and 40 per cent for financial institutions.
Of the total 60 per cent, 15 per cent would be given to high net-worth individuals who have put in bids for over 1,000 shares each.
Shourie said the government would mop up Rs 993 crore (Rs 9.93 billion) from the sale of its 25 per cent stake in Maruti.
The government has also decided to retain the 10 per cent oversubscription as a result of which the total sale of equity would be 7.94 crore (79.4 million) shares.
Of this, the government would give 60 per cent equity to retail investors in accordance with the wishes expressed by Prime Minister Atal Bihari Vajpayee to broadbase the equity in the car venture, Shourie told reporters via videoconferencing from Malaysia.
As a result of the oversubscription, the government equity in the joint venture with Suzuki Motor Corporation of Japan would come down to marginally over 17 per cent, which would be divested within a year.
The government had ceded majority control to Suzuki last year by foregoing participation in preferential issue for a consideration of a control premium of Rs 1,000 crore (Rs 10 billion).
Dubbing the Maruti IPO as "historic" and the "biggest public issue ever thorough book building", Shourie said the realisation for the government through the issue was nine times more than what was transferred to Suzuki way back in 1992.
Of the total 60 per cent shares being allocated to retail investors, 45 per cent would be given to those whose bids were up to 1,000 shares and 15 per cent for the high networth individuals who had bid for over 1,000 shares, he said.
As per the guidelines of Securities and Exchange Board of India, 60 per cent of the shares was to be allocated to financial institutions and 40 per cent to retail investors.
But, after the bullish response to the Maruti IPO from retail investors, Vajpayee had said that the small investors should be rewarded for their response and increased the allocation for retail investors to 60 per cent.
Shourie acknowledged the contribution of Deputy Prime Minister L K Advani for his personal intervention in the IPO process.
He also thanked Lok Sabha Speaker Manohar Joshi during whose tenure as the heavy industries minister the Maruti divestment process started.
