Hero Honda promoters pledge 5.32% stake for about Rs 1,585 cr

NEW DELHI: The country's largest two-wheeler maker Hero Honda toady said its promoter firm Hero Investments Pvt Ltd has pledged 5.32 per cent stake in it with IL&FS Trust Company Ltd for an estimated Rs 1,585 crore.

According to a filing to the Bombay Stock Exchange (BSE), Hero Honda said the promoters have pledged 1,06,16,678 shares, representing 5.32 per cent of the total paid-up capital of the auto major, on March 1.

On the basis of the closing price on March 1 of Hero Honda's scrip on the BSE, the value for the pledged shares comes out to be Rs 1,584.65 crore.

Hero Investments Pvt Ltd (HIPL) is one of the main shareholders of Hero Honda. It holds 17.33 per cent stake in the company as on December 31, 2010.

Last month, Foreign Investment Promotion Board had deferred a proposal of HIPL to bring in foreign equity worth Rs 4,500 crore for clearance by the Cabinet Committee on Economic Affairs.

In December last year, the promoters of HIPL, the B M Munjal family, had agreed to buy out the entire 26 per cent stake of Japan's Honda in Hero Honda for an undisclosed sum.

It is understood that the Munjals are looking to raise funds to finance the buyout through stake sale in HIPL to private equity and other foreign funds.

The shares of Hero Honda today closed 2.15 per cent up at Rs 1,534.45 a piece on the BSE.