India’s top automaker by sales Maruti Suzuki announced on 8 August that it would pay Suzuki Motors in preference shares to take over a local manufacturing plant in Suzuki Motor Gujarat Private Limited.

The board of Maruti Suzuki approved the issuance of equity shares to Suzuki Motors on 8 August.

The total deal value will be based on the plant’s book value as of 29 August, and the number of shares and the price will be decided later.

The plant mentioned above, located in the western Indian state of Gujarat, has a book value of Rs 12,800 crore after depreciation.

The Company, in its stock filing, said, “The Board of Directors, at its meeting held today, has approved issue of equity shares of the Company on preferential allotment basis to Suzuki Motor Corporation (SMC), as consideration for the acquisition of 100% stake of SMC in Suzuki Motor Gujarat Private Limited (SMG). This will be subject to applicable regulatory and statutory approval(s), as may be required, including requisite approval of shareholders. Post such acquisition, SMG will become a wholly owned subsidiary of the Company,”

Through this deal, the stake of Suzuki in the Indian automaker will be increased by 1.8%; as of now, Suzuki has a 56.48% stake in Maruti.

Maruti plans to roll out six EVs by 2030, and each one will be produced at the said plant.

Bhargava said that Maruti engineers are taking over production at the plant and will get a better understanding of EV manufacturing, which is critical for the future.