Suzuki deal over Gujarat plant beneficial for MSIL: Bhargava

Tags: News
Seeking to assuage investor concerns, Maruti Suzuki India Chairman R C Bhargava today said the deal to give its Gujarat plant to Suzuki for operations was "inheritingly beneficial" for the company and issues will get resolved gradually.

Seven mutual fund houses including ICICI Prudential MF, Reliance MF and UTI MF, are opposing Maruti's Japanese parent Suzuki Motor Corp's move to make a Gujarat unit its wholly- owned subsidiary as the deal would transform MSIL into a distribution company from a manufacturing one.

When asked about concerns raised by fund houses, Bhargava said, "I am sure as time goes by gradually these concerns will get resolved and we will do our best to resolve concerns for everybody."

"I am confident that when something is inheritingly beneficial it may take time for it to be appreciated but it will get known and things will work," he added.

Suzuki last month decided to take over Maruti's proposed plant in Gujarat and invest in the unit through wholly-owned unit Suzuki Motor Gujarat Pvt Ltd.

State-run Life Insurance Corp (LIC), which holds 6.93 per cent stake in the company, has also sought clarifications on the matter.

While the market regulator is yet to hear officially from the fund houses, it is already looking into the matter on suo motu basis.

Last month, the fund houses had written a letter to MSI: chairman saying the decision is clearly "neither fair nor in the interest of shareholders".

Shares of MSIL took a beating on bourses following the reports falling by up to 6 per cent last week. The scrip, however, rose by 1.51 per cent to close at Rs 1,622.40 on the BSE today.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.
Image CAPTCHA
Copy the characters (respecting upper/lower case) from the image.

EDITORIAL OF THE DAY

  • Time and tide are ripe for megaplans such as Sagarmala

    To say that India’s infrastructure is in urgent need of upgrade would be to state the obvious.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Taslima Nasreen

No place for the poor anywhere

As we sit in the comfort of our homes reading ...

Purnendu Ghosh

Are you worth remembering?

One of the best inscriptions I have come across in ...

Dharmendra Khandal

Tiger in urban landscape

Ranthambhore is in a no-win situation. Just a few days ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture