Hero MotoCorp tanks 5% after promoter sells 4% stake to fund new avenues

New Delhi: Hero MotoCorp Ltd promoter Brij Mohan Lall Munjal today pared four percent stake in the company by selling seven million equity shares to ‘fund new growth avenues’. [caption id=“attachment_1313899” align=“alignleft” width=“380”]  Representational image. Reuters[/caption] “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,” Hero MotoCorp said in a statement. According to information available with BSE, the promoter stake in Hero MotoCorp stood at 39.92 percent at the end of December 2014. Following the sale, the over $5 billion Hero Group still holds a significant stake of over 36 percent in the company, the statement added. However, company officials declined to share the details of the transaction. Elaborating on the funds’ use, the company said: “The Group will use the sale proceeds to fund new growth avenues available through the government’s ‘Make in India’ initiative.” The Prime Minister’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, it 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 shares were trading 4.79 percent down at Rs 2,671.75 apiece during afternoon session on the BSE. PTI