HIPL pledges 2.6% stake in Hero Honda to IL&FS

By PTI Apr 19 2011 , New Delhi

The country's largest two-wheeler maker Hero Honda today said its promoter group firm Hero

Investments Pvt Ltd (HIPL) has pledged 2.6 per cent of the company's stake estimated to be worth over Rs 900 crore.

According to a filing to the Bombay Stock Exchange (BSE), HIPL has pledged 52 lakh shares on two equal transactions to IL&FS Trust Company Ltd on April 13.

Although the auto major did not reveal the deal size, as per the closing price of Rs 1,735.10 a share on the day of transaction, HIPL is likely to have raised over Rs 900 crore.

With this, HIPL has pledged a total of 19.94 per cent stake of Hero Honda.

Shares of Hero Honda today fell 4.64 per cent to close the day at Rs 1,777.20 a piece on the BSE.

Earlier in March, HIPL had pledged 5.98 per cent stake of Hero Honda to IL&FS Trust Company.

While Hero Honda did not provide the exact amount of its stake being pledged to IL&FS Trust Co by HIPL, with the latest pledging it is estimated to be around 8.58 per cent, raising a total of estimated Rs 2,685 crore.

Following the exit of Hero Honda's erstwhile Japanese promoter Honda, HIPL's stake in the Munjals-promoted auto major was increased to 43.33 per cent earlier this month from 17.33 per cent as on December 31, 2010.

In March, the Cabinet Committee on Economic Affairs had approved a proposal for a Rs 4,500 crore foreign direct investment in HIPL by Bain Capital and Lathe Investment.

The Hero Group had earlier stated that the two private equity firms, BC India Investors II, a part of Bain Capital, and Lathe Investment Pvt Ltd, will together pick up a 29 per cent stake in HIPL for Rs 3,650 crore.

In December last year, the Indian promoter of the two-wheeler maker, the B M Munjal family, had agreed to buyout the entire 26 per cent stake of Honda in Hero Honda for Rs 3,841.83 cror

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