Maruti Suzuki To Issue 1.23 Cr Equity Shares to Suzuki Motor Corp

Maruti Suzuki India has announced the issuance of 1.23 crore equity shares to Suzuki Motor Corporation on a preferential basis. This announcement was made through an exchange filing on Tuesday.

The face value of each of these equity shares is Rs 5, and they will be issued for Rs 10,420.85 per share. Notably, this price represents a 2.6% discount to Maruti Suzuki's closing price on Monday, October 16.

The total value of the shares being issued to Suzuki Motor Corp. amounts to a whopping Rs 12,820 crore, marking a significant financial transaction in the automotive industry.

Following this preferential share issue, Suzuki Motor Corporation's shareholding in Maruti Suzuki, India's largest passenger car manufacturer, will rise from 56.48% to 58.19%.

This development comes on the heels of Maruti's board terminating the contract manufacturing agreement with Suzuki Motor Gujarat. The company has also exercised its option to acquire the shares of SMG from Suzuki Motor Corporation, further solidifying their collaboration.

Suzuki Motor Corporation currently owns 100% of Suzuki Motor Gujarat. Despite these changes in ownership, Maruti Suzuki assures that there will be no disruptions in terms of actual production, logistics, sales, or related costs. Cars that were previously supplied by SMG as a contract manufacturer will continue to be supplied as before.

The shares of Maruti Suzuki erased all previous gains and fell to the day's low in response to the news. Currently, the stock has shown some recovery and is trading 0.1% higher at Rs 10,714.50 per share.