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Hero MotoCorp gets nod to merge Hero Investments with itself

04 Jun 2012 Evaluate

Hero MotoCorp (HMCL) has received its board’s approval to merge Hero Investments (HIPL), the investment arm of the Hero Group, into HMCL for creating incremental shareholder value. The merger is, however, subject to approval of the Delhi High Court, the shareholders and creditors of the respective companies, and other statutory authorities as applicable.

The shareholders of HIPL include the partnership firm Brijmohan Lall Om Prakash (BMOP) which holds 71.63%, and private equity (PE) investors BC India Private Investors (19.81%) and Lathe Investment (8.56%). BC India Private Investors is an affiliate of Bain Capital LLC, while Lathe Investment is a wholly-owned subsidiary of Government of Singapore Investment Corporation (GIC).

The promoter family owns 52.21% in HMCL through HIPL which holds 43.33% shares, Bahadur Chand Investment (BCIPL) which holds 8.67% shares, and 0.21% shares through other entities including individuals.

As a result of the merger, the shareholders of HIPL - BMOP (through its partners in representative capacity), BC India. Investors and Lathe Investment will now directly hold approximately 31.04%, 8.58% and 3.71% shares respectively in HMCL.

The merger of HIPL into HMCL is going to benefit the public shareholders of Hero MotoCorp, as this will result in an increase in the public float of HMCL by approximately 12.29% (being the shareholding of the investors in HMCL, which will now form part of public shareholding and not that of the promoter group). This will in turn increase the trading stock of the shares of HMCL. Increase in the public stock as well as trading stock will positively impact the liquidity of the shares of Hero MotoCorp.

All costs and expenses arising out of or in connection with implementing the scheme of amalgamation shall be borne and paid by HIPL. The shareholders of HIPL will indemnify HMCL against any liability that may arise in future.

Upon the amalgamation of HIPL with HMCL in terms of the Scheme of Amalgamation, HMCL shall issue and allot equity shares to the members of HIPL whose names appear in the Register of Members of HIPL on the Record Date.

Hero MotoCorp Share Price

5229.25 68.40 (1.33%)
17-Apr-2026 16:59 View Price Chart
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