Maruti Suzuki board to consider preferential allotment of shares on November 24

Maruti Suzuki India will consider issuance of preferential shares to its parent Suzuki Motor Corporation at its Board of Directors meeting, scheduled on November 24.

“In continuation to our letters dated 31st July, 2023, 8th August, 2023 and 17th October, 2023, you are kindly informed that a meeting of the Board of Directors of the Company is scheduled to be held on Friday, the 24th November, 2023, to consider and approve allotment of 1,23,22,514 equity shares of the Company to SMC on a preferential basis pursuant to the approval of the members received on 16th November, 2023 through Postal Ballot,” said Maruti Suzuki India in its exchange filing today.

India's largest passenger car manufacturer reported a standalone net profit of ₹3,716.5 crore in the quarter ended September 2023. Maruti Suzuki India's net profit jumped by a robust 80.28 percent as compared to ₹2,061.5 crore in the same quarter last year. 

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Increased non-operating income, lower commodity prices, improved net sales, and cost-cutting initiatives were the major driving factors for the surge in its net profit. The auto major’s standalone revenue in Q2FY24 grew 23.8 percent to ₹37,062.1 crore from ₹29,930.8 crore in the year-ago period.

Earlier this year, the Maruti Suzuki board had approved the termination of the contract manufacturing agreement (CMA) with Suzuki Motor Gujarat Private (SMG) Limited. The company also announced its plan to acquire shares of SMG from Suzuki Motor Corporation in the meeting.

The board had evaluated two available options for acquiring the SMC equity in SMG, the first one being payment in cash. The second one was issue of MSIL equity shares on preferential allotment basis.

On Tuesday, shares of Maruti Suzuki India settled 0.34 percent lower at ₹10,530.75 apiece on the BSE.