The government today approved the sale of its remaining 10.27-per cent stake in passenger car maker Maruti Udyog in which India''s largest insurer, Life insurance Corporation (LIC) emerged as the second-highest shareholder with a 12.5-per cent stake behind Suzuki''s 54 per cent.

Yesterday the government received 36 bids from banks, insurance companies and mutual funds ranging between Rs765 and Rs850 against a floor price of Rs760 set by the government.The government''s residual stake was divested to banks, insurance companies and mutual funds for Rs2,368 crore ($573 million).

The stake was sold at about Rs796 a share, with the "weighted average realisation" being Rs797.48 a share. Life Insurance Corp., State Bank of India, Punjab National Bank and Corporation Bank were the major acquirers of the government''s stake, in which LIC was the most aggressive bidder collecting 1.3 crore shares of the total 2.96 crore that were put on the block.

Maruti Udyog was started as an equal joint venture between the Indian government and Japan''s Suzuki Motor Corp. in 2003 the NDA government began the process of divesting control over the company through a public sale, as part of efforts to exit non-core sectors of the economy.

Last year when the government offloaded 8 per cent stake in Maruti, LIC had cornered 1.68 crore shares aggregating to five per cent of the total equity.

The increase in holding could make LIC eligible for a board position in Maruti. The shares would, however, be transferred to LIC only in September when shareholders of Suzuki Motors Corporation, which now owns the company, approve the change in the articles of association of the company.