Maruti board permits preferential share issue to Suzuki Motor Corporation

Maruti Suzuki India's Board of Directors of Maruti Suzuki has approved the allotment of 1,23,22,514 equity shares of the company to Suzuki Motor Corporation (“SMC”) on a preferential basis, a regulatory filing said on Friday.

In October, the automobile major had decided to issue and allot 1.23 crore fully paid-up equity shares of Rs 5 each to Suzuki Motor, at a price of Rs 10,420.85 apiece, taking the total to Rs 12,800 crore.

"INR 10,420.85/- per equity share, (aggregating INR 12,841.1 Crores being consideration other than cash, discharged by the Company for purchase of 100 per cent equity shares of Suzuki Motor Gujarat Private Limited (“SMG”) owned by SMC) determined as per Valuation Report dated 17th October, 2023 issued by RBSA Valuation Advisors LLP, the Independent Registered Valuer)," the company said in its filing.

After the preferential issue of shares, SMC's equity share in MSIL will rise to 58.19 per cent from 56.48 per cent.

SMC, meanwhile, has agreed to transfer the ownership of its manufacturing plant in Gujarat to MSIL, for a total value consideration of Rs 12,800 crore.

Maruti Suzuki India stock is currently trading at Rs 10,501.0, up by 0.11 per cent, at 11.50 AM on Friday.

Maruti Suzuki has recently reported highest-ever monthly sales, selling 199,217 units in October 2023. The company's total exports also registered an uptick of about 7 per cent year-on-year as the number went up from 20,448 units to 21,951 units for the month of October.

Total year-to-date sales for Maruti Suzuki sales were up by 8.36 per cent as the company sold 96,456 vehicles more during April-October 2023 than in the same period last year.

Last month, the largest carmaker in India reported that its profit for the quarter grew 80.3 per cent year-on-year (YoY) to Rs 3,716.5 crore compared with Rs 2,061.5 crore in the corresponding quarter last year. Maruti Suzuki said its net sales for the quarter rose 24.5 per cent YoY to Rs 35,535.10 crore against Rs 28,543.50 crore in the same quarter last year, thanks to higher sales volume and product mix.

Operating Ebit for the quarter was up 95 per cent YoY at Rs 3,990.10 crore against Rs 2,046.30 crore YoY.

In July-September quarter, Maruti Suzuki sold 5,52,055 vehicles. Sales in the domestic market stood at 482,731 units while exports stood at 69,324, the automobile major said.

The same period in the previous year had seen total sales of 5,17,395 units, comprising 4,54,200 units in domestic and 63,195 units in export markets.

Maruti Suzuki said its sales for the first half of FY24 stood at Rs 66,380 crore compared with Rs 53,830 crore in the comparable period last year. The auto giant made a net profit of Rs 6,201 crore in in H1FY2024 against Rs 3,074 crore in H1FY2022-23.

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