Hero MotoCorp promoter sells 4 per cent stake to fund diversification

Hero MotoCorp promoter Brij Mohan Lall Munjal on Wednesday pared four per cent stake in the company by selling seven million equity shares to 'fund new growth avenues'.

"In a major initiative towards diversification into fast growth areas, the BML Munjal-led Hero Group has divested seven million equity shares in its flagship company Hero MotoCorp Ltd," the two-wheeler manufacturer said in a statement.

According to information available with the Bombay Stock Exchange (BSE), the promoter stake in Hero MotoCorp stood at 39.92 per cent at the end of December 2014.

Following the sale, the over US $5 billion Hero Group still holds a significant stake of over 36 per cent in the company, the statement added.

However, company officials declined to share the details of the transaction.

Elaborating on the use of funds, the company said, "The Group will use the sale proceeds to fund new growth avenues available through the government's 'Make in India' initiative."

Prime Minister Narendra Modi'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, the two-wheeler maker said.

On focus on its core business, the company said, "The Hero Group remains strongly committed to its core two-wheeler business, where it sees enormous potential, both in India and overseas."

Hero MotoCorp sold 6.64 million two-wheelers in 2014, including over 200,000 units in global markets.

The company's scrip was trading 4.79 per cent lower at Rs 2,671.75 a piece during afternoon session on the BSE.