Maruti divestment: Centre invites EoIs for advisor, auditor

Anindita Dey

Mumbai, Oct 17: After its recent success with the privatisation of CMC and Hindustan Teleprinters, the Government is understood to have invited expressions of interest (EoIs) from merchant bankers for the appointment of an advisor and auditor for the sell-off of Maruti Udyog Ltd.

According to merchant banking sources, while a separate investment banker will be appointed for advising the government on the disinvestment of Maruti, a chartered accountant firm will be selected for doing the valuation on behalf of the government. To this effect, bids have also been asked from CA firms for participating in the disinvestment process. However, no confirmation could got on this.

Sources also added that almost all top firms have put in their expressions of interest for the same. The government is shortly expected to call each of them for a presentation before the final appointment is made. The shortlisting is expected to be over within a week’s time and the final appointment of the firms is likely to be over by November, sources say. It may be mentioned that the two-stage divestment plan of Maruti involves a rights offering in which the Government would renounce its portion of the rights in favour of leading domestic financial institutions, who would, in turn, pay a renunciation premium to the Government. After fresh capital is infused into the company through the rights offering and the government mobilises the renunciation premium, both the Government and the FIs will then separately divest their shares at a premium through an offer for sale and an initial public offering (IPO).

Meanwhile, Tata Sons, which has recently concluded the deal of bagging 51 per cent in government-owned CMC, is also believed to have called for presentations from merchant bankers for going ahead with an initial public offering of Tata Consultancy Services. Tata officials, when contacted, said that nobody has been called for any formal presentation though “merchant bankers keep meeting us”.

Sources added that the presentations have been called for from top five merchant bankers and is likely to start sometime next week. TCS was reported to be coming out with IPO in the third quarter of the current fiscal. However the entire decision hinges upon market sentiment, officials had earlier said. Sources added that the IPO could take a long time as the structuring of the whole offer is expected to be lengthy.