Hero Group sells 4 per cent stake in Hero MotoCorp

To invest proceeds in Make in India campaign

Brijmohan Lall Munjal-led Hero Group has divested 7 million equity shares (around 4 per cent equity) in its flagship group company Hero MotoCorp.

Financial details of the transaction were not disclosed but at current market price the stake sale could have fetched the group around Rs 1,860 crore.

Following the sale, the over $5-billion Hero Group still holds a significant stake of over 36 per cent in the company, Hero Motocorp said. As per the shareholding pattern given by the company to the exchanges, promoters held 39.92 per cent stake in the company as of December 31, 2014.

Among the promoters, the major shareholders included Bahadur Chand Investments (8.67 per cent), Brijmohan Lall Munjal (6.21 per cent), Renu Munjal (6.21 per cent), Pawan Munjal (6.21 per cent), Suman Kant Munjal (6.21 per cent), and Sunil Kant Munjal (6.21 per cent).

Foreign institutional holding in the stock stood at 39.34 per cent, domestic institutional holding at 7.43 per cent while the holding of others, including retail investors, stood at 13.31 per cent as of December 31, 2014.

The group will use the sale proceeds to fund new growth avenues available through the government’s Make in India initiative. 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, Hero Motocorp said.

At the same time, the Hero Group remains strongly committed to its core two-wheeler business, where it sees enormous potential, both in India and overseas, Hero Motocorp added.

Hero Motocorp had sold 6.64 million two wheelers in the calendar year 2014, including over 2 lakh unit sales in its global market. The company had reported sales of 5.58 lakh units in January 2015.

The company had posted a net profit of Rs 582.98 crore for the quarter ended December 31, 2014 as compared to Rs 524.66 crore for the quarter ended December 31, 2013. Total income, however, had decreased to Rs. 6932.85 crore for the quarter ended December 31, 2014 from Rs 6972.46 crore for the quarter ended December 31, 2013.