Hero Group To Sell 29 Pc Stake In HIPL For Rs 3,650 Cr

Hero Investments Pvt Ltd (HIPL) which is promoter firm of the India's largest two-wheeler maker-Hero Honda is to buy 29 per cent stake by paying Rs. 3,650 crore. With it, the HIPL is the major share holder in the Hero Honda group and has 17.33 per cent stake in the joint venture as on 31st December 2010.

At the starting of this month, the company had tied-up with Private Equity firms Lathe Investment Pvt Ltd which is fully subsidiary of Government of Singapore Investment Corporation (Ventures) Pvt Ltd and BC India Private Investors II, an arm of Bain Capital LLC. As per insiders of the company, both the companies will equally invest around Rs. 3,650 crore for 29 per cent stake in the Hero Investments and 43.33 per stake of Honda in the joint venture Hero Honda will be grabbed by the companies. And already Foreign Investment Promotion Board (FIPB) has recommended the proposal to the cabinet committee to the approval with investment of around 1,200 crore.

Earlier, it has been announced that Hero Group which is owned by BM Munjal Family is to pay Rs 3,841.83 crore to Honda for its 26 per cent stake in the Hero Honda Joint venture and for it, HIPL will finance for this big payout.

Noted that Hero Honda Group which includes most popular bikes in its portfolio such as Hero Honda Karizma, Hero Honda Hunk, Hero Honda CBZ Xtreme, Hero Honda Splendor, Hero Honda Passion Pro and one scooter Hero Honda Pleasure had gone separate ways with announcement of buying Honda's 26 per cent stake in the venture.

Now both the firms shall work with their own resources therefore Hero Group to launch its bikes in India while Honda to spread wings through HMSI which is a 100 per arm of it and doing well.