Brij Mohan-led Hero Group, which controls India’s largest two-wheeler maker Hero MotoCorp Ltd, offloaded 7 million shares or a 3.5 per cent stake in the company on Wednesday to fund plans to diversify into other businesses, as per a stock market disclosure.
The group sold 7 million shares at a weighted average price of Rs 2664.93
a piece through a bulk deal on NSE, fetching about Rs 1,865 crore (or approximately $300 million), data available with the NSE showed.
Following the transaction, the holding of the group in its flagship Hero MotoCorp has come down to just over 36 per cent from earlier 39.92 per cent.
“(Brij Mohan Lal-led parent Hero Group) will use the sale proceeds to fund new growth avenues available through the government’s ‘Make in India’ initiative,” Hero MotoCorp said in a statement. It, however, said that it would remain committed to the two-wheeler market both in India and overseas.
The Prime Minister’s ‘Make in India’ platform has opened up new vistas, some in very high growth areas, and the Hero Group — with its experience, scale of operations and brand equity — is uniquely placed to leverage these emerging opportunities, it said.
Hero MotoCorp sold 6.64 million two-wheelers in the calendar year 2014, including over 2,00,000 units sales on the global market. Hero MotoCorp is the world’s largest two-wheeler manufacturer in terms of production capacity.
Hero Group had ended its 26-year partnership with Honda Motor Co in 2010.
In the December quarter, Hero MotoCorp clocked an 11.1 per cent increase in net profit to Rs 582.98 crore on 0.6 per cent decline in total income to Rs 6,932.85 crore as compared to a year ago period.
Shares of Hero MotoCorp closed the day at Rs 2,663.45, down 5.09 per cent from its previous close on BSE in strong Mumbai market.
(Edited by Joby Puthuparampil Johnson)