Maruti surges 7.6% on plan to seek approval for Gujarat plant
Mumbai: Shares of Maruti Suzuki India rose 7.6 percent Tuesday after the company decided to seek minority shareholders' approval for the controversial Gujarat plant, which parent Suzuki Motor Corp decided to take over.
After surging 9.37 percent to Rs 1,899.90 -- a 52-week high, the car-maker's scrip closed at Rs 1,868.85, up 7.6 percent on the BSE.
On the National Stock Exchange, the stock settled at Rs 1,869.50, a gain of 7.54 percent. The scrip was the best performer on the key Sensex and Nifty indices.
Under pressure from institutional investors, Maruti Suzuki India on Saturday decided to seek minority shareholder approval after tweaking some of its earlier proposals for the Gujarat plant, which Suzuki Motor decided to take over.
Although investments at the Gujarat plant will be funded by Suzuki via a wholly owned subsidiary, they will now be done through depreciation and the equity brought in by the parent without a 'mark-up' on cost of production.
In case the contract manufacturing agreement between them is terminated, the facilities of the Gujarat subsidiary would be transferred to Maruti Suzuki India at book value and not at fair value as envisaged earlier.
The decisions were taken at a board meeting on Saturday, which was attended by Suzuki Chairman Osamu Suzuki.
Fund houses, which have been opposing the proposal to allow Suzuki to make cars for Maruti in Gujarat, said the decisions taken by the board appeared to be in the interests of the company and investors.