Maruti dominates India's small car market

"The road shows will kick off on 30 May in Bombay," Reuters news agency quoted a company spokesman as saying.

The Indian government is selling a quarter of its 45.5% stake in Maruti, which has been majority owned by Japanese auto firm Suzuki Motor for the last five years.

Maruti's stock trading debut is expected to take place on the Bombay stock exchange in late June, the company spokesman added.

Political hurdles

The sale of the government's stake in Maruti has been held up by disagreements between Hindu nationalists and economic reformers over India's wider privatisation programme.

It was originally billed to take place by March 2003, but was postponed in February.

Pradip Baijal, secretary in the department of disinvestment, said then that Maruti's privatisation was unlikely to take place before the end of the year.

Maruti has made a profit every year since it was founded in 1981, with the exception of the year to March 2001, when it plunged 2.7bn rupees (�40m ; $64m ; 56m euros) into the red.

It returned to profit in the year to March 2002, but analysts say this owes much to cost cutting as sales of Maruti cars have fallen.

It controls about 56% of the Indian car market, three times more than nearest rival Hyundai, according to Mr Lalwani.

Squeeze

"Foreign competition is a big threat, especially in the small car segment which Maruti dominates," Deepak Lalwani of stockbrokers Astaire and Partners in Bombay.

He said Maruti remains the only player in India's market for budget vehicles - defined as those costing below 300,000 rupees (�4,425 ; $7,080 ; 6,195 euros).

However, a unit of India's giant Tata conglomerate has unveiled plans to build a car costing a third of this amount.

If successful, this would pose a serious threat to Maruti's market share, Mr Lalwani told BBC World Service Radio.