Suzuki deal over Gujarat plant beneficial for MSIL: Bhargava
Mar 05 2014 , Gurgaon
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.