Govt receives 34 EOIs for Maruti stake sale

All 27 eligible banks and seven financial institutions have submitted expressions of interest (EOIs) for acquiring an eight per cent in Maruti Udyog Ltd (MUL) put on sale by the government.

"All the 27 public sector banks, one financial institution and six insurance companies have submitted EOIs for acquiring shares in Maruti," sources said.

Today was the last day for submitting the EOIs. "The offer by the government to sell eight per cent shares in Maruti has evoked strong interest among all the eligible public sector financial institutions and aggressive bidding is expected," sources added.

The financial institutions see the offer of sale as an opportunity to acquire a large number of shares of a well performing company at an attractive price.

"If an institution would have tried to acquire bulk shares of Maruti in market it would have jacked up the prices of the company's shares. They see (the offer for sale) as a good opportunity to acquire a sizeable stake in the company," sources added. The government wants the financial institutions to bid aggressively for a stake in Maruti.

If the bids were not up to the government's expectations and were above the indicative price, the government would reserve the right to not sell all the 2,31,12,804 equity shares on offer, sources said. The shares comes with a lock-in period of six months. After the EOIs are examined by the government, financial bids would be called.

The indicative price would be fixed on the basis of the price of the Maruti shares on the stock exchanges. The government has kept the minimum bid value at Rs 10 crore and a single institution can bid for all the shares on offer.

However, it has said that the present holding of the institution in Maruti and shares transferred from government to it should not exceed 10 per cent equity of MUL on the date of such transfer. At the time of submission of bids, institutions have been asked to disclose their exact shareholding in the company.

SBI Capital Markets Ltd and Kotak Mahindra Capital Company Ltd are advising the government on the transaction.

After transaction is over the government's share in Maruti will come down to 10.24 per cent.