Investors’ concerns over Gujarat plant drag Maruti stock nearly 5% down

Investors’ concerns over Gujarat plant drag Maruti stock nearly 5% downStock in Maruti Suzuki India Limited (MSIL) slipped more nearly 5 per cent on the Bombay Stock Exchange (BSE) on Friday as the company failed to assuage investors' concerns over its Gujarat plan.

In January this year, Maruti had announced an arrangement with Japan-based Suzuki Motor Corp's under which the Indian company would procure cars from to be manufactured at the Gujarat plant. The Japanese parent firm said it would invest US$488 million (nearly Rs 3,050 crore) in the plant.

Earlier this week, the MSIL gave clarifications about pricing and funding for the capacity expansion in the Gujarat plant, but it added to the confusion around the structure of the proposed manufacturing arrangement.

Experts and analysts said that the stock slipped due to uncertainty over the proposed manufacturing arrangement for the Gujarat plant, which was proposed by its MSIL. The plant is expected to start production by end of 2017.

On Friday, Maruti shares slipped to as low as Rs 1,573 apiece. However, the stock remained a fraction of its lost ground and ended at Rs 1,586 apiece, down 4.5 per cent from its previous close. Since the announcement of the proposed manufacturing arrangement on January 28, the stock has lost 7 per cent.