"There are strong rumours doing the rounds that the government is exploring the option of offering up to 24 per cent of its holding to Suzuki," sources said. This would be keeping in line with the finance minister's budget announcement that the government's stake in non-strategic PSUs would be down to 26 per cent. While top sources in the ministry have hotly denied any such move, there are others who believe that this possibility cannot be ruled out. The recent patch-up has clearly indicated that Suzuki called the shots while framing the conditions for the rapprochement. The tenure of managing director, RSSLN Bhaskaradu, has been abruptly advanced to December 1999 and it is feared that there will be an immediate divideamong the workforce with most tilting towards his successor, Jagdish Khattar, who will also function as joint managing director.

"We expect the government to seriously consider its position as a 26 per cent shareholder and one of the alternatives is by offering it to Suzuki," sources said. According to them, this is one way of collecting a substantial sum which can be used productively like correcting the fiscal deficit.

What is absolutely clear is that MUL is a "super navratna" of the government where any move to divest its stake will have to made after careful deliberation.

It cannot be an encore of the early nineties when the share was offered to Suzuki at a price of less than Rs 200 to enahnce its stake to 50 per cent. This time around, experts believe that leading merchant bankers should be called for counsel before embarking on an equity dilution.

If Maruti Udyog does become a 74:26 joint venture between Suzuki and the Indian government, it is actually of little consequence to the latter. It isclear by now that carmaking is an activity that can be best handled by those who know the business.

The other option is, of course, for the 24 per cent to be placed with financial institutions who could also have a say in the management of the company. Observers are emphatic that the centre should only retain a 26 per cent stake in all non-strategic PSUs. This, in fact, should apply to some strategic ones also like petroleum companies which would do well with less government control. As regards MUL, the general opinion is that the government should either a) sell its entire 50 per cent holding to an Indian auto manufacturer; b) offload 24 per cent in favour of FIs or c) sell, as a last resort, 24 per cent to Suzuki at a market-related price after seeking advice from merchant bankers.