The deal, likely to be announced before Christmas, will see the Munjal family buying Honda's stake through a special purpose vehicle (SPV) by raising a bridge loan, the newspaper said, citing persons familiar with the development.
Hero Honda is India's largest motorcycle manufacturer.
The Munjals will divest 60-70 percent stake in this SPV to a group of two to three private equity firms to pay back the loan, the paper said, adding Carlyle, Kohlberg Kravis Roberts & Co, TPG, Bain Capital and Warburg Pincus were in the fray.
Officials at the Hero Group, Honda Motor, and the private equity firms could not immediately be reached by Reuters for comment.
Published 14 December 2010, 03:17 IST