Hero MotoCorp top Nifty loser after I-T dept detects Rs 1,000 cr bogus expenses

Shares of Hero MotoCorp slipped over 9 per cent amid a rising market on Tuesday after the Income Tax (I-T) department said it was analysing around Rs 1,000 crore in expenses that were suspected to be bogus in the probe at the two-wheeler major.

The I-T department is also going through digital data and various other documents as part of its probe.

Further, it is also probing the deal of a farmhouse on the outskirts of Delhi for which cash worth Rs 100 crore was allegedly paid.

Shares of Hero MotoCorp lost up to 9.32 per cent to Rs 2,155 against the previous close of Rs 2,376.60 on the BSE. Later, the shares closed 7.08  per cent lower at Rs 2,208. A total of 0.67 lakh shares of the firm changed hands, amounting to a turnover of Rs 15.02 crore.

I-T raid continues for 2nd day at premises of Hero MotoCorp, Chairman Pawan Munjal

Market cap of the firm fell to Rs 44,125 crore on the BSE. The stock was the top Nifty loser today, closing 6.68 per cent lower at Rs 2,219 against the previous close of Rs 2,377.95.

The stock hit a 52-week high of Rs 3,089 on June 9,2021 and a 52-week low of Rs 2,148 on March 8, 2022.

Earlier in March, the I-T department conducted raids at the offices and residences of the promoters of Hero MotoCorp, including Pawan Munjal.

Statements of those present were recorded and a panchnama was done.

Commenting on the fall in stock, Ashwin Patil, senior research analyst at LKP Securities said, "Despite the fall, the stock does not look very attractive to us in the long term, mainly due to pressure on its volumes and a tepid outlook given the rise in fuel costs, slow recovery in both urban and rural markets and a 25-30 per cent hike in acquisition costs of the two-wheelers since the pandemic started. However, the knee jerk reaction shown today in the stock may see some recovery tomorrow, provided the management gives a satisfactory clarification to the street."