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.

EDITORIAL OF THE DAY

  • Saffronites need to build their own edifices and narratives

    The news that the BJP-led NDA government, no admirers of India’s first prime minister, want to give a ‘contemporary’ look to the capital’s mos

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

Amita Sharma

Examining times for learning

The central advisory board of education in its meeting on ...

Zehra Naqvi

Capturing change

The pace of change in the world around us can ...

Gautam Gupta

Bring on the Benares brigade

It was in 2003 when I first started work and ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture