New Delhi: Shareholders of car maker Maruti Suzuki India (MSI) have approved a proposal to raise foreign institutional investors (FII) limit in the company to up to 40% from the current 24%.
In a regulatory filing on Friday, the company said 99.99% shareholders, comprising over 26.68 crore votes, favored the resolution to hike shareholding limit for FIIs, foreign portfolio investors (FPIs) and qualified foreign investors (QFIs) from 24% up to 40%. The shareholder voting was held during the AGM held last month.
Last year, the company’s board had recommended to increase the FII limit to 40% from 24%, subject to shareholder approval and RBI nod.
MSI chairman R.C. Bhargava said that a lot of domestic and foreign investors had told the company that the 24% cap was “an unnatural restriction to buy and sell the company’s shares freely and if the limit is increased, minority shareholders can also benefit as trading in shares will increase."
When MSI was listed in 2003, FII shareholding was limited to 24% as per the Foreign Exchange Management Regulations, 2000 and FDI policy.
As of 15 June 2015, the company’s promoter company Suzuki Motor Corporation had a stake of 56.21% in MSI while FIIs have a stake of 21.75% in the car maker. Shares of MSI today ended 1.87% down at Rs4,272.80 apiece on the BSE.