The initial public offer of car market leader Maruti Udyog will hit the markets in the first week of June, Divestment Minister Arun Shourie said on Monday.

"Maruti IPO is on track. The prospectus has been filed with the Securities and Exchange Board of India. So, I am confident that we would be able to approach the markets in the first week of June," Shourie told reporters in New Delhi.

The public issue would be for sale of the government's 25 per cent stake in Maruti, in which Japanese auto maker Suzuki Motor Corporation has 54.2 per cent stake.

The draft prospectus for the IPO was filed with market regulator Sebi on April 25.

The Foreign Investment Promotion Board had recently granted a generic permission for participation of Non-Resident Indians, Overseas Corporate Boards and foreign institutional investors in the domestic offering.

Last year, the government ceded control of Maruti to Suzuki following a Rs 400 crore (Rs 4 billion) rights issue. Suzuki acquired about 4 per cent equity in the company for a consideration of around Rs 1,400 crore (Rs 14 billion), including a renunciation premium of Rs 1,000 crore (Rs 10 billion).

Under the deal, the government is required to exit the company following a two-stage divestment process, involving a public offering of shares. It proposes to shed 25 per cent of its 45 per cent equity in the first phase and another 20 per cent during the second phase by 2004.