Bain, GIC poised to take stake in India’s Hero Honda

According to the Financial Times, the Munjal family requested the stake buyers to pay INR1,500-1,650 ($33-36.4) a share, with the raised capital going toward the Munjals as opposed to the company or its other shareholders. Hero Honda was the joint venture launched between India's Hero Group and Japan's Honda Motor Company, the latter which held 26.21% of the company and sought to sell its stake last year. Yet, according to the FT, after Honda was unable to attain a satisfactory sales bid, the Munjals acquired its shares at under INR1,000 ($22) a share, representing a large discount.

AVCJ previously reported that the Munjal family had been in talks with a range of PE firms and SWFs to offload the stake, including KKR., TPG, Blackstone, Carlyle, CD&R and Temasek Holdings.

Last week, Hero Honda Motors reported a 20% drop in net profit in the fourth quarter of 2010, from INR5.36 billion ($118 million) in 2009 to INR4.29 billion ($94.4 million). That figure represents the smallest quarterly net profit in nearly two years, with company officials citing the rising cost of manufacture materials among the reasons for the drop.

 

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• Topics
• South Asia
• Bain Capital Asia
• GIC Special Investments