Maruti Suzuki India Ltd. has announced its plan to issue 1.23 crore equity shares of the company, each with a face value of Rs 5, to Suzuki Motor Corporation on a preferential basis. This strategic move is in accordance with the company’s aim to strengthen its partnership and facilitate growth. The announcement was made in an exchange filing on October 17.
As of 10:30 am, the stock was trading at Rs 10,636, experiencing a marginal 0.65 percent decline from the previous close on the NSE.
Following the preferential issue of shares, Suzuki Motor Corporation’s ownership in India’s largest passenger car manufacturer will rise from 56.48 percent to 58.19 percent.
The issuance of these shares comes after Maruti’s board decided to terminate the contract manufacturing agreement with Suzuki Motor Gujarat Pvt. Ltd. Additionally, Maruti exercised its option to acquire shares of SMG from Suzuki Motor Corporation.
In terms of production, there will be no changes in the production process, logistics, sales, or related costs. The vehicles that were previously manufactured by SMG as part of a contract manufacturing agreement will continue to be supplied as before, ensuring business continuity and a seamless transition.
This strategic move demonstrates the commitment of both companies to further strengthen their partnership and work collaboratively to enhance their presence in the Indian automotive market.
