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The Hero Group is restructuring the shareholding of the two promoter firms of two-wheeler maker Hero MotoCorp — Hero Investments Pvt Ltd (HIPL) and Bahadur Chand Investments Pvt Ltd (BCIPL).
The transfer of shares will take place within close family members, thus not triggering the market regulator SEBI's takeover clause. The move, expected to take place around June 5, will also not result in any change in the shareholding pattern of Hero MotoCorp.
According to a statement to the bourses, family patriarch Mr Brij Mohan Lall Munjal's wife Ms Santosh and second son Mr Suman are transferring part of their shares in HIPL and BCIPL to the other sons Sunil and Pawan. The latter two are currently the Joint Managing Directors at Hero MotoCorp.
Out of the 21,610 shares held by Suman, representing 71.63 per cent stake in HIPL, a total of 14,407 shares will be transferred and split almost equally between Mr Pawan and Mr Sunil. As a result, all three brothers will have a 23.88 per cent stake in HIPL.
Bain Capital India and Lathe Investments also hold 19.81 and 8.56 per cent stake in HIPL each. The private equity funding was raised last year to finance the Hero Group's purchase of Honda Motor's 26 per cent stake in Hero Honda (now Hero MotoCorp).
Meanwhile, in BCIPL, Mr Suman will transfer 8,484 shares out of the 12,800 shares (98.46 per cent stake) he currently owns to Pawan and Sunil. This aggregates to 65.26 per cent share transfer in BCIPL. Their mother, Ms Santosh, will additionally transfer her entire holding of 150 shares (1.15 per cent stake) in BCIPL to sons Pawan and Sunil.
All three brothers will again hold around 33 per cent stake in BCIPL post the transaction.
The majority shareholders in Hero MotoCorp, HIPL and BCIPL currently hold a 43.33 and 8.67 per cent stake in the company, respectively.
The restructuring follows a two-year old move where Mr Suman had acquired and consolidated stake of his cousin Mr Vijay Kumar Munjal and uncle Mr Satyanand Munjal in HIPL and BCIPL under a family-settlement agreement.
Hero MotoCorp shares at the BSE were down 0.04 per cent to Rs 1,869.85 on Monday.
roudra.b@thehindu.co.in
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