Maruti Suzuki shares slide 4.5 pct amid concerns over Gujarat plant

Written by PTI | Mumbai | Updated: Mar 1 2014, 18:46pm hrs
Maruti Suzuki India LtdShares of Maruti Suzuki India Ltd fell by as much as 4.5 per cent amid investor. Reuters
Shares of Maruti Suzuki India Ltd (MSIL) today fell by as much as 4.5 per cent amid investor concerns regarding its Gujarat plant.

After falling 5.33 per cent to Rs 1,573 in intra-day trade, shares of Maruti finally ended at Rs 1,586.30, down 4.54 per cent on the BSE.

At the NSE, the stock slumped 4.33 per cent to settle at Rs 1,592.

The stock was the worst performer among the blue-chips on both Sensex and Nifty.

Market experts said that the stock fell amid uncertainty over the arrangement under which the auto maker plans to procure cars from its Japanese parent Suzuki Motor Corp's Gujarat plant.

Last month, Japan's Suzuki Motor Co (SMC) had said it will invest USD 488 million (about Rs 3,050 crore) in setting up a car factory in Gujarat by 2017, which was proposed by its subsidiary MSIL.

This had led to investor concerns related to pricing, funding of capacity expansion in the proposed contract manufacturing arrangement.

MSIL in a regulatory filing yesterday said: "The Suzuki Motor Corporation's subsidiary in Gujarat would operate on the basis that while it would not make any losses, it would also not accumulate any cash surplus."

The plant, which would be the first fully-owned factory of the Japanese giant, would have an initial capacity of 1,00,000 cars a year, all of which would be supplied to MSIL, as per the plan.

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