WionDrive News Desk 
Maruti Suzuki India (MSI) has said that its Board of Directors has approved the allotment of 1.23 crore equity shares to its parent company Suzuki Motor Corporation (SMC) on a preferential basis. The shares have a face value of INR 5 each at a price of INR 10,420.85 per equity share, the company said in a regulatory filing. After this allotment, SMC’s stake in MSI will increase to 58.19% with 18,29,51,476 from 56.48% with 17,06,28,962 shares.
After the approval, shares of MSI were trading 0.08 per cent up at INR 10,501.95 a piece on the BSE.
This move comes after Maruti Suzuki shareholders had approved a proposal to issue shares to SMC on a preferential basis last week for a 100% stake in Suzuki Motor Gujarat (SMG). The announcement came shortly after SMG reported a 30% jump in turnover at ₹31,853 crore for FY23 from ₹24,440 crore in FY22. The aim of the acquisition is to align the production operations under a single management, considering the company’s future growth prospects. MSI envisages to have a total production capacity of 40 lakh units annually by 2030-31.
On July 31, the MSI board had approved the termination of the contract manufacturing agreement with SMG and the acquisition of its shares by SMC at a price to be determined in accordance with all applicable laws and regulations. The company’s Chairman R C Bhargava had said that the share-swap method adopted for the acquisition of SMG is “far better for the shareholders of the company”.
SMC, since 2014, has invested Rs 18,000 crore in SMG, which is its fully-owned subsidiary. It supplies its entire production exclusively to MSI. It has a production facility in Gujarat with an installed capacity of 7.5 lakh units per annum.
