MUMBAI – India's government sells its remaining 10.27% holding of 29,679,709 shares in small-car maker Maruti Udyog Ltd. to 32 financial institutions for Rs23.7 billion ($578 million).

Bids were made by 36 entities for a total of 35.9 million shares at prices ranging from Rs850 ($21) to Rs765 ($18.60). The government realized an average price of Rs796 ($19) per share in the sale.

The NewDelhi-based Maruti at one time was an equal joint venture between the government and Suzuki Motor Corp., which maintains a 54.2% share in the domestic auto maker.

The next-largest shareholder now is the Life Insurance Corp. of India, with 12.5%. Other financial institutions hold a total 10.1%, with public institutions controlling the 23.2% balance.

Over the years, the state has trimmed its holding, and its exit now makes little difference to Maruti's operations, company officials say. Indeed, the auto maker today dominates nearly half the passenger-car market in India, with most of its sales coming from small cars.

The company last month reported a better-than-expected 24% gain in net profit for the March quarter.

While the government's sell-off of Maruti is in line with its policy to walk away from industries that do not have a core status in its programs, the state has been enriched by its series of stake sales over the last five years, earning a total Rs59.4 billion ($1.4 billion).

Suzuki paid the government Rs10 billion ($243 million) to take controlling interest in 2002, and share sales garnered another Rs10 billion that same year. A further sell-off by the state in 2006 brought Rs15.8 billion ($384 million).

Last year, the government earned Rs1.3 billion ($32 million) in dividends on its 29.6 million shares from Maruti's net profits of Rs15.6 billion ($379 million).

Throughout the 23 years of partnership between Suzuki and the state, there have been sharp differences over the transfer of technology to the Indian auto maker, the right to appoint a chairman and managing director and the establishment of subsidiaries – all of which Suzuki's will ultimately prevailed.

But although the government no longer has legal status or direct control over Maruti, it will continue to have considerable influence.

State-owned corporations such as LIC, public-sector banks and financial institutions usually act in unison under directions from the government. With their combined shareholding, these entities can be a formidable force.

For the present, their investment in Maruti shares is more for financial returns than controlling the auto maker's policies.

Maruti stock was listed at Rs132 ($3.21) per share five years ago but closed at Rs765 ($18.58) following the government's final sell-off last week. It is this 6-fold growth over five years that attracted investors.

Maruti, which reported a 17% increase in sales in April, has been cutting costs, upgrading technology and using common platforms and parts. The recently launched rebadged Suzuki SX4, its first sedan in seven years, is aimed at younger buyers in their 30s.

With its fresh investments, new plants and contemporary models, Maruti continues to be a formidable force in the market place.