Shares of Maruti Suzuki (MSIL) plunged 8.12% to Rs 1563.20 on Tuesday after the automobile manufacturer announced that the Gujarat plant, which will begin operations by 2017, will be fully owned by the parent company Suzuki Motor Corporation.
“MSIL would financially benefit from the interest earnings resulting from not investing its money in this project. It would also benefit because the vehicles would be sold to MSIL by the Suzuki subsidiary without any return on capital employed,” the company stated in a press release. “MSIL would be able to avoid all risk inherent in any investment,” it added.
Meanwhile, Maruti Suzuki reported 36% y-o-y jump in its net profit to Rs 681 crore. The net sales dropped 3% y-o-y to Rs 10,619 crore.