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Bain exits Hero MotoCorp, sells 1.5% for $115M

26 November, 2015

Global private equity firm Bain Capital has exited its four-year-old investment in Hero MotoCorp, world’s largest motorcycles and scooters manufacturer, via a block deal on Thursday.

In the latest deal, Bain Capital sold its entire 2.95 million shares representing 1.5 per cent stake for $115 million (Rs 763 crore) to institutional investors.

As per data, it sold bulk of this on NSE at Rs 2,591.25 a share. More than half of the total was picked by a portfolio investment unit under Morgan Stanley.

Shares of Hero MotoCorp closed at Rs 2,680.8 per share, up 1.3 per cent on the Bombay Stock Exchange in a strong Mumbai market on Thursday.

Bain Capital had invested $566 million (Rs 2,500 crore) in Hero MotoCorp in 2011. It had co-invested with GIC to help the promoters buy out Honda in the JV.

In 2013, Bain Capital and Singapore’s sovereign fund GIC picked direct equity stake in the firm after the promoters merged Hero Investments Pvt Ltd with Hero MotoCorp. Subsequently, the PE firm held 8.5 per cent stake in the motorcycle manufacturer.

Last year, Bain part sold its stake twice in the company in June  and November pocketing a total of $650 million, excluding dividends.

With the latest exit, the PE firm has almost doubled its value of investment in local currency, including dividends, as per VCCircle estimates. The returns in dollar terms, which Bain Capital would repatriate, would be lower given the decline in value of Indian rupee during the period.

GIC remains an investor in the motorcycle maker.

In February, Munjals who are the promoters of the motorcycle manufacturer, sold  5.3 per cent stake in the company. Currently, the promoters hold 34.6 per cent stake in the company.


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Bain exits Hero MotoCorp, sells 1.5% for $115M

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