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Shares of Maruti Suzuki India today surged nearly 10 per cent after the company decided to seek minority shareholders' approval for the controversial Gujarat plant, which its parent Suzuki Motor Corp had decided to takeover from it.
After a strong opening, shares of the car-maker further zoomed 9.37 per cent to Rs 1,899.90 -- its 52-week high on the BSE Sensex.
On the NSE Nifty, the stock jumped 9.81 per cent to touch a one-year peak of Rs 1,909.
The scrip was the best performer among the blue-chips on both the key indices Sensex and Nifty during the morning trade.
Under pressure from institutional investors, Maruti Suzuki India on Saturday decided to seek minority shareholders' approval after tweaking some of the earlier proposals for the controversial Gujarat plant, which its parent Suzuki Motor Corp had decided to takeover.
Although investments at the Gujarat plant will be funded by SMC via a wholly-owned subsidiary, they will now be done through depreciation and the equity brought in by parent without 'mark-up' on cost of production.
Also, in case of termination of the contract manufacturing agreement between them, the facilities of the Gujarat subsidiary would be transferred to Maruti Suzuki India Ltd (MSIL) at book value and not at fair value as was envisaged before.
The decision was taken at a board meeting held on Saturday, which was also attended by SMC Chairman Osamu Suzuki.
Fund houses, which have been opposing the proposal, said the decisions taken by the board appeared to be in the interest of the company and the investors.
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