After suffering its biggest fall in a year & a half on Tuesday, Maruti Suzuki India Ltd (MSIL) stock jumped more than 8 per cent in early morning trade on Wednesday as the company's management successfully allayed investors' concerns about the company's upcoming Gujarat plant.

Maruti Suzuki yesterday announced that its upcoming Gujarat manufacturing facility would be owned and operated by a subsidiary of its parent firm Suzuki and not by it. The announcement triggered concerns that sourcing vehicles through the Suzuki subsidiary would eat into Maruti's margins.

The stock on Tuesday crashed 8 per cent. But after the MSIL management's assurance that Maruti would benefit from not having to invest huge amounts of money in the plant and thus would be able to avoid all risks.

In response, MSIL stock jumped more than 8 per cent in morning hours today. As of 09.30 a. m., the stock traded 6.5 per cent higher at Rs 1,664 a share, after hitting a high of Rs 1,694.75. In early hours, the stock was the top gainer on the 50-share Nifty.

Global brokerages also appear to agree with the car maker's management for now. Macquarie upgraded Maruti stock from "neutral" to "outperform" and said the decline in the stock was exaggerated. CLSA, an Asia-Pacific focused brokerage, said the Gujarat plant arrangement would materially provide a boost to Maruti's free cash flow.