The largest investor in Hero MotoCorp Ltd sold $300 million worth of shares in country's biggest maker of motorcycles and scooters on Wednesday, freeing up cash to invest in new sectors.
Brij Mohan Lal, who owns shares through several entities, sold nearly 7 million shares, or a 3.5 per cent stake, through multiple open market transactions, cutting his share to just over 36 per cent from 39.92 per cent.
"(Brij Mohan Lal-led parent Hero Group) will use the sale proceeds to fund new growth avenues available through the government's ‘Make in India’ initiative," Hero said in a statement.
Analysts expect the funds to be used for expansion into the power and real estate sectors.
The shares were sold in a price range of 2,663.95 rupees to 2, 677, 65, according to Thomson Reuters data and a source directly involved in the process.
According to the offer's term sheet, the shares had been offered in an indicative price band of 2,664 rupees to 2,720 rupees, a discount of as much as 5 per cent from its Monday's closing price of 2,805 rupees.
Hero's shares fell over 5 per cent ahead of the transaction, after Reuters reported the planned sale.
Kotak Mahindra Capital was the main arranger for the deal.
