Maruti To Consider Equity Issue To Parent Suzuki For Gujarat Unit

Maruti Suzuki India Ltd. will consider issuing equity shares on a preferential basis to its parent company, Suzuki Motor Corp., in a board meeting on Oct. 17.

The move is for acquiring a 100% stake in Suzuki Motor Gujarat Pvt., subject to the approval of the members through postal ballot and all regulatory compliances, according to an exchange filing on Thursday.

Presently, Suzuki Motor Corp. holds 100% of the Gujarat manufacturing facility, which sells various models—including the Baleno, Dzire and Swift—to Maruti Suzuki at cost.

As discussed in the previous board meetings, Maruti Suzuki chose to issue equity shares over cash payments as they found it to be favourable for their minority shareholders and the company. Both the companies would conclude this buyout by the end of the current financial year.

The acquisition will help Maruti Suzuki to reduce the complexities in production by bringing it under one management and to increase its production capacity to 4 million cars per annum by FY31, and for better efficiency in production and supply chain.

The current shareholding of Suzuki Motor is 56.48% as of June 2023, according to the shareholding pattern of Maruti Suzuki India.

Shares of Maruti Suzuki closed 1.6% higher at Rs 10,576.45 apiece on the BSE as compared with a 0.10% fall in the benchmark Sensex.