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Maruti Suzuki India to organise investor roadshow on Gujarat plant

Maruti Suzuki India to organise investor roadshow on Gujarat plant

Snapshot: With the move, MSI hopes to convince investors to let parent Suzuki Motor Corp. own a proposed land in Gujarat.

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India’s largest automaker, Maruti Suzuki will kick-off a roadshow this month to explain to global and domestic investors its move to let parent Suzuki Motor Corp own a proposed plant in Gujarat. The company’s management led by chairman R C Bhargava, along with managing director and CEO Kenichi Ayukawa and chief financial offer Ajay Sethi will meet institutional investors from the U.S, UK, Asia and India. 

In March, under pressure from institutional investors, Maruti decided to seek the approval of minority shareholders after tweaking some of the earlier proposals for the Gujarat plant, which parent Suzuki Motor Corp (SMC) had decided to take over. Opposing the move, Maruti's institutional investors approached SEBI, seeking its intervention to safeguard the interests of minority shareholders. Private sector mutual funds and insurance companies, which own almost 7 per cent of the company, led the opposition.

Yesterday however, Maruti Suzuki officials met up with the new Gujarat chief minister, Anandiben Patel to discuss issues arising out of the changed plant ownership structure. The resulting revised proposal stated that the investments in the Gujarat plant would be funded by SMC via a wholly owned subsidiary through depreciation and equity brought in by the parent without a ‘mark-up’ on cost production. 

A company spokesperson remarked, “It is a two-month long programme starting from the middle of June to middle of August. The meeting with the institutional investors will take place during this period. Once the roadshow is over, the process for voting by shareholders will start.”

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