October 1, the deal can be construed as a related-party transaction requiring approval from public shareholders.
Last month, mutual fund houses had written to Bhargava highlighting concerns arising from the deal. The fund houses asked Maruti Suzuki to rethink the decision as it was clearly "neither fair nor in the interest of shareholders."
Investors have said that turning this project over to a Suzuki subsidiary instead of MSIL would lead to significant erosion of value for MSIL. They are also concerned about the royalty paid by Maruti to its Japanese parent.
MSIL had said in the filing that the price of vehicles to the company would include only the cost of production incurred by the subsidiary and "just adequate cash (net of all tax) to cover incremental capital expenditure requirements."
The institutional investors have sought explanations on terms such as incremental capex.
Fund managers said MSIL has been facing declining returns on equity and the Gujarat plant would be the right opportunity to deploy cash profitability.
The parent firm received Rs 7,000 crore as royalty over the past four years, or 5.7 per cent of sales, the fund houses said, adding that in the next four years, Rs 8,500 crore would be paid as royalty.
The latest letter from institutional investors has come days ahead of a board meeting of MSIL, scheduled for March 15.
According to sources, the meeting has been originally called to discuss the company's yearly business plan, but the issue of Gujarat project may also come up for discussion.
While independent board members of the company, who have also been marked a copy of the investors' letter, have given an in-principle approval to the Gujarat project, they may discuss the finer details this transaction on March 15.
When contacted, independent director Pallavi Shroff declined to comment but others, including D S Brar, Amal Ganguli and R P Singh could not be reached for comments.