While LIC is the single largest minority investor in the country's largest car maker with 6.8 percent holding, mutual funds hold around 6.53 percent and domestic financial institutions hold 7.95 percent.
Ever since Marutis Japanese parent announced its plans to set up an assembly line Gujarat as its fully-owned subsidiary eight months ago, the minority investors were up in arms, as they feared that Suzuki would later make Maruti just a contract manufacturer and not full-fledged car company.
"We are yet to take a call on the issue," an LIC official said, and pointed out that its too early and the company is yet to get its shareholders nod.
On the other hand, mutual fund houses are divided on the issue. They feel that why should the company not set up its own plant, rather than setting up it through a subsidiary whose future is uncertain.
Maruti Suzuki will meet its shareholders at an extraordinary general body meeting next month to secure their approval for the project. The company needs to secure the permission of at least 75 percent shareholders for the investment in the plant.
"We havent formed an opinion on Maruti Suzukis move to set up its trading unit in Gujarat as of now and we will take a call at the Maruti shareholders meeting early November," a senior official of LIC told PTI requesting anonymity.
When asked if the LIC will go by the recommendation of proxy advisors, the official said, "its wrong to believe that LIC will go by the advice of proxy advisors. Let me reiterate that we are yet to form an opinion on the issue."
The mutual fund houses are confused about what will be the future of the subsidiary once its 15-year agreement ends with Maruti Suzuki.
"We dont know what will happen to the subsidiary after 15 years when its agreement with Maruti-Suzuki comes to an end," CIO of a MF house said, adding, "we are currently evaluating the companys plans before we finally come up with our own stand on the matter."
However another official said the company has assured that the proposed plant will function on the basis of no-profit-no loss and it is likely to transfer its assets to Maruti-Suzukis book in future.
The proxy advisory firm Institutional Investor Advisory Services (IIAS) has advised Maruti shareholders to get reply on certain queries put out by it, before voting for the transaction.
"The resolution on the Gujarat plant will be presented under Section 188 as a related party transaction. Therefore, the promoters (Suzuki) will not be able to vote on this transaction-the vote of non-promoter shareholders will determine the final outcome of the resolution," IIAS chief operating officer, Hetal Dalal, said.
The queries put out by IIAS include Is Suzuki trying to reduce its dependence on Maruti and making itself more saleable; 'What does Maruti plan to do with the excess cash, How is this transaction any different from when Manesar was proposed to be a 100 percent subsidiary of Suzuki and above all, Is this transaction really necessary.