The much-awaited public offering of the shares of auto major Maruti Udyog Ltd has cleared another major hurdle with the Securities and Exchange Board of India approving the draft prospectus for the initial public offer, slated to hit the market by early June.

"The IPO of Maruti has been cleared," Sebi chairman G N Bajpai told reporters in New Delhi on the sidelines of a seminar on 'Securities Law and Capital - The Road Ahead', organised by the Institute of Company Secretaries of India.

The country's largest bourses -- National Stock Exchange and Bombay Stock Exchange -- had on Wednesday cleared the proposed IPO of Maruti, paving the way for listing of stocks on the bourses.

The government proposes to shed as much as 25 per cent of its equity in the car giant as part of the upcoming public offering thereby diluting its stake to 20 per cent. This would then be followed by another tranche of public offering facilitating the exit of the government from the company.

It currently holds 44 per cent stake in the company while Suzuki Motor Corporation holds around 56 per cent.

Last year, it had ceded management control to its joint venture partner through a Rs 400 crore (Rs 4 billion) rights issue at a premium of Rs 1000 crore (Rs 10 billion).

The public issue would follow the book-building route for 72 million shares with a face value of Rs 5 per share.