BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh
BBCi CATEGORIES   TV   RADIO   COMMUNICATE   WHERE I LIVE   INDEX    SEARCH 

BBC NEWS
 You are in:  Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 


Commonwealth Games 2002

BBC Sport

BBC Weather

SERVICES 
Tuesday, 7 May, 2002, 11:05 GMT 12:05 UK
India to halve stake in auto firm
Maruti advertisement
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.


Privatisation remains the biggest theme in Indian markets over the next year

U.R. Bhat
JF Asset Management
The government would also shortly announce details for the sale of Indian Petrochemicals Corp (IPCL), the country's second-largest petrochemicals firm, Mr Shourie said.

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.

Indian Disinvestment Minister Arun Shourie
Shourie will present his plan to cabinet shortly
The government intends to first allow Suzuki to up its interest to a majority stake through a 4bn rupee rights issue, which would be followed by a initial public offering.

"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.

 WATCH/LISTEN
 ON THIS STORY
John Band, Business Transformation Partners, Bombay
"The Indian government has no reason to be in the car manufacturing business"
See also:

04 Apr 02 | Business
Indian carmaker reports turnaround
22 Mar 02 | Business
Japan to up Indian auto investment
06 Feb 02 | Business
India shares surge after sell-offs
05 Feb 02 | Business
Boost to India privatisation
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories