India's largest carmaker, Maruti Udyog Ltd, a unit of Japan's Suzuki Motor Corp, said on Thursday it would pay a Rs 1.50 dividend on each Rs 5 share for the financial year ended March 2003.

The automaker, held 54.2 per cent by its Japanese parent and poised for a public issue probably in June, said in a statement the dividend would mean a total payout of Rs 427 million.

Maruti, in which the Indian government also holds 45.54 per cent stake, announced on Wednesday net profit in 2002-03 (April-March) soared 40.1 per cent from a year ago to Rs 146.4 crore (Rs 1.464 billion) from Rs 104.5 crore (Rs 1.045 billion) in the previous year.

The firm has a dominating 50.8 per cent share of the domestic car market with its small, low-priced cars but has faced increasing competition in the past four years from new foreign entrants in the car market and local firm, Tata Engineering.

The government plans to offload 25 per cent of the carmaker's stake to the domestic public as part of its divestment drive. Suzuki has underwritten the public issue at Rs 115 a share, at which price the dividend yield would be 1.3 per cent.