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Tuesday, 7 May, 2002, 11:05 GMT 12:05 UK
India to halve stake in auto firm
![]() Suzuki is set to take majority control of Maruti
The Indian government has said it plans to halve its stake in the country's largest auto maker Maruti Udyog to 25% later this year.
The minister in charge of privatisation, Arun Shourie, said the government, which holds 49.74% of the car maker, would float part of the company on the stock market.
The two companies will be the first big-ticket privatisations in the current financial year. Advisers would be appointed on Wednesday for the sale of National Aluminium Company but that the sale of Mahanagar Telephone Nigam (MTNL), was "not on the radar now", Mr Shourie said. India plans to raise 120bn rupees (£1.67bn) from the sale of state assets in the current financial year ending March 2003. Auto sales Maruti, which holds about two-thirds of the new car market in India, is already 50% owned by Japan's Suzuki Motor.
"It will be good for Maruti, for the government, for Suzuki and for the privatisation process," said Mr Shourie, adding further details would be announced after cabinet approval. More sell-offs Shares of state-run firms, or public sector undertakings (PSU), have been the big gainers on the Indian stock market in 2002. The Bombay Stock Exchange's PSU Index has leapt by 76.3% in 2002, compared with a 3.7% rise in the benchmark Bombay index. "Privatisation remains the biggest theme in Indian markets over the next year," said U.R. Bhat, chief investment officer at JF Asset Management, with $500m invested in Indian assets. The government has received three bids for IPCL, including one from state-run refiner Indian Oil and Reliance Industries, the biggest petrochemicals producer. Over the coming months the government plans to sell stakes in two large, profitable oil refiners, Hindustan Petroleum and Bharat Petroleum. Others on the privatisation list include the nation's biggest shipping line, Shipping Corporation of India, and Bharat Heavy Electricals, a power equipment maker.
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