Suzuki Motor Corporation has raised its stake in Maruti Suzuki to 55 per cent, fuelling speculations about its intention for the Indian subsidiary and future plans of taking total control of India’s largest carmaker.
Recently, Suzuki raised its stakes in Maruti Suzuki by 8 per cent through secondary market purchase, and plans to increase it further. Now, Indian investment laws allow companies to make creeping acquisitions of up to 5% a year and any increase beyond 55% will require Suzuki to make an open offer for another 20%.
Being at the top of car sales in India has put Maruti Suzuki in a highly esteemed position in Suzuki’s global operations. Maruti Suzuki already contributes nearly 80% of Suzuki’s total profits, and when we look at the volumes too, it has outsmarted Suzuki’s numbers.
Auto analysts view the increase in stakes as a part of a bigger game plan, especially after the VW-Suzuki deal where Volkswagen picked up a 20% stake in Suzuki. It is likely that Suzuki would want to gain total control over Maruti.
After Suzuki, which currently holds 55% of the stakes, FIIs and LIC are the biggest stakeholders in Maruti, owning 22.21% and 11.22%, respectively. The current market value of Maruti stands at around $10 billion and Suzuki will have to pay about $5 billion, if it were to delist the company altogether.
“There’s no reason why Suzuki would want (it) … unless it has a … larger game-plan lined up,” one former Maruti official said. “Suzuki gets nothing by upping its stake unless it has a longer term strategy of which this is a part,” added the analyst.
Despite global auto manufacturers invading the Indian car market, Maruti has managed to be on the top of the Indian car sales figure.
Recently, Suzuki raised its stakes in Maruti Suzuki by 8 per cent through secondary market purchase, and plans to increase it further. Now, Indian investment laws allow companies to make creeping acquisitions of up to 5% a year and any increase beyond 55% will require Suzuki to make an open offer for another 20%.
Being at the top of car sales in India has put Maruti Suzuki in a highly esteemed position in Suzuki’s global operations. Maruti Suzuki already contributes nearly 80% of Suzuki’s total profits, and when we look at the volumes too, it has outsmarted Suzuki’s numbers.
Auto analysts view the increase in stakes as a part of a bigger game plan, especially after the VW-Suzuki deal where Volkswagen picked up a 20% stake in Suzuki. It is likely that Suzuki would want to gain total control over Maruti.
After Suzuki, which currently holds 55% of the stakes, FIIs and LIC are the biggest stakeholders in Maruti, owning 22.21% and 11.22%, respectively. The current market value of Maruti stands at around $10 billion and Suzuki will have to pay about $5 billion, if it were to delist the company altogether.
“There’s no reason why Suzuki would want (it) … unless it has a … larger game-plan lined up,” one former Maruti official said. “Suzuki gets nothing by upping its stake unless it has a longer term strategy of which this is a part,” added the analyst.
Despite global auto manufacturers invading the Indian car market, Maruti has managed to be on the top of the Indian car sales figure.
Couldn?t be written any better. Reading this post reminds me of my old room mate! He always kept talking about this. I will forward this article to him. Pretty sure he will have a good read. Thanks for sharing!
I am sure that i will come back to your blog soon. Keep us posting interesting articles
I was looking for pivotal info on this subject. The advice was consequential as I am about to launch my own portal. Thanks for providing a missing relationship in my business.
Took me time to study all the comments, but I exceptionally enjoyed the article. It proved to be Truly beneficial to me and I am confident to all the commenters here! It’s everlastingly satisfactory when you can not only be up on, but also entertained! I’m unshakeable you had satirize handwriting this article.
Nice information, many thanks to the author. It is incomprehensible to me now, but in general, the usefulness and significance is overwhelming. Thanks again and good luck!