Hero Honda Declares 3,500% Interim Dividend
NEW DELHI Hero Honda declared a 3,500% interim dividend of . 70 per equity share of . 2 each. In its board meeting held on Wednesday, the company considered an interim dividend at the rate of 3500%, Hero Honda said in a communication to BSE. The company, which has huge cash reserves in excess of . 4,000 crore, did not mention the capital outgo due to the dividend payments. An email query to the company went unanswered.
Yamaha may take partnership route for mass mobikes
Yamaha is exploring strategic options among domestic two-wheeler companies to offer products in the 100-125-cc engine capacity segment. This category represents over 70 per cent of the bikes sold in the country.
The Japanese bike maker has called a pitch from around five merchant bankers in search of the right model, multiple sources close to the development told Business Line.
OPTIONS
“They are looking for a strategic partnership with a domestic player who can help them with technology and low-cost production in the mass motorbike segment. We have given them 2-3 options and they are expected to take a call in 10-15 days coinciding with their board meeting for annual results,” said a top merchant banker involved in the negotiations, while another banker added that top industry names have been suggested for the deal.
Among the options suggested to the company are a technological or a production tie-up for low cost manufacturing. The third option is a strategic stake sale by Yamaha to the interested partner as part of an agreement on technology and production.
Responding to queries on the development, Mr Hiroyuki Suzuki, CEO and Managing Director, India Yamaha Motor (IYM) said, “We do not comment on any market speculation.”
Yamaha has a portfolio of six models in the 125-250 cc segment. Collectively this segment accounts for just 8 per cent of the market for motorcycles in India (2.10 lakh units sold in 2010-11).
MARKET SHARE
The entry-level segment will be key for IYM which is looking to turn its operations profitable and help it counter growing competition. At present, it has four products in the segment, but only about one per cent market share (sold 67,420 units in 2010-11).
Present in India since 1985, Yamaha operates two plants – Surajpur, Greater Noida (UP) and Faridabad, Haryana. However, only the former manufactures complete motorcycles with a six lakh per annum installed capacity. Both these plants were a part of Yamaha's buyout of its joint venture partner, Escorts' 50 per cent stake, in 2001. At present, Mitsui and Co has a minority stake in IYM. The company has invested around Rs 800 crore over the last three years for new product development, dealer network expansion and capacity expansion.
The company is trying to ramp up its output, which is around 3.5 lakh units annually. With demand exceeding production, average waiting periods on popular models like the R15, FZ & SZ series hover at about four to five weeks.
“Around January, the parent company had invested about Rs 400 crore. A majority of this is expected to go into the plans for a third plant (with an export focus), besides the launch of new products like a scooter range by 2012,” said the industry source.
The appointment of Mr Suzuki as the Managing Director and CEO in November last year is also an indication of Yamaha's plan to step up its game in India. Mr Suzuki, who is also a Director in the parent company, is expected to act as a trouble-shooter for Indian operations, industry sources said.
The Japanese bike maker has called a pitch from around five merchant bankers in search of the right model, multiple sources close to the development told Business Line.
OPTIONS
“They are looking for a strategic partnership with a domestic player who can help them with technology and low-cost production in the mass motorbike segment. We have given them 2-3 options and they are expected to take a call in 10-15 days coinciding with their board meeting for annual results,” said a top merchant banker involved in the negotiations, while another banker added that top industry names have been suggested for the deal.
Among the options suggested to the company are a technological or a production tie-up for low cost manufacturing. The third option is a strategic stake sale by Yamaha to the interested partner as part of an agreement on technology and production.
Responding to queries on the development, Mr Hiroyuki Suzuki, CEO and Managing Director, India Yamaha Motor (IYM) said, “We do not comment on any market speculation.”
Yamaha has a portfolio of six models in the 125-250 cc segment. Collectively this segment accounts for just 8 per cent of the market for motorcycles in India (2.10 lakh units sold in 2010-11).
MARKET SHARE
The entry-level segment will be key for IYM which is looking to turn its operations profitable and help it counter growing competition. At present, it has four products in the segment, but only about one per cent market share (sold 67,420 units in 2010-11).
Present in India since 1985, Yamaha operates two plants – Surajpur, Greater Noida (UP) and Faridabad, Haryana. However, only the former manufactures complete motorcycles with a six lakh per annum installed capacity. Both these plants were a part of Yamaha's buyout of its joint venture partner, Escorts' 50 per cent stake, in 2001. At present, Mitsui and Co has a minority stake in IYM. The company has invested around Rs 800 crore over the last three years for new product development, dealer network expansion and capacity expansion.
The company is trying to ramp up its output, which is around 3.5 lakh units annually. With demand exceeding production, average waiting periods on popular models like the R15, FZ & SZ series hover at about four to five weeks.
“Around January, the parent company had invested about Rs 400 crore. A majority of this is expected to go into the plans for a third plant (with an export focus), besides the launch of new products like a scooter range by 2012,” said the industry source.
The appointment of Mr Suzuki as the Managing Director and CEO in November last year is also an indication of Yamaha's plan to step up its game in India. Mr Suzuki, who is also a Director in the parent company, is expected to act as a trouble-shooter for Indian operations, industry sources said.
Bajaj Auto ties-up with SBI for inventory finance to dealers
MUMBAI: The country's second largest two-wheeler-maker, Bajaj Auto, today said it has tied-up with State Bank of India to offer inventory finance to its dealers.
Through this tie-up, a cash credit facility ranging between Rs 25-lakh-Rs 5-crore will be made available to Bajaj Auto's dealers who predominantly fall in the small and medium enterprise ( SME) category for State Bank of India.
Through this tie-up, a cash credit facility ranging between Rs 25-lakh-Rs 5-crore will be made available to Bajaj Auto's dealers who predominantly fall in the small and medium enterprise ( SME) category for State Bank of India.
Hero Honda declares interim dividend of Rs 70 per share
MUMBAI: Hero Honda Motors Ltd, India's largest motorcycle maker, on Wednesday said its board has declared an interim dividend of 70 rupees ($1.6) per share.
Last month, Hero Investments agreed to buy Honda Motors' 26 percent stake in Hero Honda Motors for around $851 million, with the Japanese automaker exiting its joint venture in India after more than 26 years.
Last month, Hero Investments agreed to buy Honda Motors' 26 percent stake in Hero Honda Motors for around $851 million, with the Japanese automaker exiting its joint venture in India after more than 26 years.
Yamaha ties up with Deccan Chargers as official team partner
NEW DELHI: Two-wheeler maker Yamaha today said it has tied up with IPL franchise Deccan Chargers (DC) as an official team partner for the ongoing session.
"The deal entitles Yamaha the right to be referred as the 'Official Team Partner' status in all its advertising and promotions, including web promotions, right to be mentioned in all official media release by DC, right to unlimited usage of DC name and logo," India Yamaha Motor said in a statement.
"The deal entitles Yamaha the right to be referred as the 'Official Team Partner' status in all its advertising and promotions, including web promotions, right to be mentioned in all official media release by DC, right to unlimited usage of DC name and logo," India Yamaha Motor said in a statement.
TVS sell over 3 million star motorcycles
Sales of TVS StaR motorcycles have crossed 3 million units since its launch in 2004, according to a press release from TVS Motor Company.
The strategy of offering an economy segment motorcycle with executive features has paid off, says the company.
TVS StaR was among the earliest to come with a five-year warranty, which was followed with an offering of electric start, as a standard fitment, another first in this segment.
TVS StaR was introduced as part of the company's customer-centric approach.
“The brand philosophy of being a complete value for money product, constant upgrades, styling and refreshing graphics has helped us achieve this milestone,” said the release quoting Mr H.S. Goindi, President Marketing, TVS Motor Company.
The strategy of offering an economy segment motorcycle with executive features has paid off, says the company.
TVS StaR was among the earliest to come with a five-year warranty, which was followed with an offering of electric start, as a standard fitment, another first in this segment.
TVS StaR was introduced as part of the company's customer-centric approach.
“The brand philosophy of being a complete value for money product, constant upgrades, styling and refreshing graphics has helped us achieve this milestone,” said the release quoting Mr H.S. Goindi, President Marketing, TVS Motor Company.
Hero to unveil new brand identity in July
After announcing separation from former joint venture partner Honda Motor Co. Ltd, Hero Honda Motors Ltd (HHML) will unveil its new brand identity in the second week of July, the company decided at a meeting on Wednesday.
Around the same time, it will also close the monetary transaction with the Japanese firm.
“Capacity expansion and branding strategy were the two things discussed in the meeting,” a board member present in the meeting said on condition of anonymity. “We have hired a branding expert who is working closely with our team of experts. The new brand identity will be unveiled on 14 July.”
Calls made to the company spokesperson and chief financial officer remained unanswered. An email sent to the company did not elicit any response either.
The new brand identity will not only help the company in venturing into the overseas market but it will also allow the company to source components from alternative vendors.
“As long as the name of Honda exists on the product, component sourcing can be done from the approved vendor list. Once the re-branding under Hero name happens, HHML will be free to scout for alternative vendors, if there is need,” Chirag Shah, a sector analyst with Mumbai-based brokerage firm Emkay Research, wrote in an 8 April report on Hero Honda.
The company has hired London-based branding expert Wolff Olins, as previously reported by Mint, to revamp the brand.
The new strategy is aimed at focusing on the group’s motorcycling pedigree and promoting individual brands such as Passion and Splendour.
In the recent cricket World Cup and in the ongoing Indian Premier League, the company hasn’t mentioned its name in advertisements for the Karizma and the Hunk on billboards or at cricket grounds.
“Honda has a lot of cachet in the Indian market. Hero will, hence, have to do a fair bit of work,” said Arvind Sharma, chairman and chief executive, Leo Burnett India Pvt. Ltd. “From a mass perspective, it’s critical that the new brand communicates that the firm has technology to make a motorcycle that meets international standards.”
He said this will be governed by a series of elements, which includes a new brand identity, new philosophy and models rolled out by Hero.
The Hero Honda board also decided to spend Rs.250 crore on capacity expansion, said the first person cited above. However, a part of the amount will also be utilized for the fourth plant, a decision on which is yet to be taken.
“Production capacity increased through debottlenecking. Current capacity stands at 6.2 million. There is further scope of debottlenecking. The company is aiming for 10% volume growth in FY12,” Shah wrote in his report.
The company has ample scope for expanding capacity at its plants. “We have been gradually ramping up capacity,” said another person familiar with company affairs on condition of anonymity. “A lot of debottlenecking is being done, especially at the Haridwar plant.”
Ajay Shethiya, analyst at brokerage Centrum Broking Pvt. Ltd, expects growth in the two-wheeler industry to taper off and reach the historical levels of 12-13%.
According to him, Hero Honda’s expansion plan is in line with demand and should see it through till the new plant comes up. The company ended the fiscal by selling 5.4 million vehicles as against 4.6 million a year ago.
In a circular issued to the Bombay Stock Exchange on Wednesday, the company declared an interim dividend of Rs.70 per share, causing the stock to surge 5.86% to Rs.1,735.10. The benchmark Sensex rose 2.25% to 19,696.86 points.
While Hero Group has already announced the transaction details of the deal, a formal closure will happen in the third week of July.
On Wednesday, Hero Honda appointed Toshiyuki Inuma non-executive additional director with effect from 13 April. Inuma is also a general manager of Honda’s motorcycle operations in India.
“He is just there to oversee the monetary transaction. He will step down on 19 July,” said the first person cited in the story.
Around the same time, it will also close the monetary transaction with the Japanese firm.
“Capacity expansion and branding strategy were the two things discussed in the meeting,” a board member present in the meeting said on condition of anonymity. “We have hired a branding expert who is working closely with our team of experts. The new brand identity will be unveiled on 14 July.”
Calls made to the company spokesperson and chief financial officer remained unanswered. An email sent to the company did not elicit any response either.
The new brand identity will not only help the company in venturing into the overseas market but it will also allow the company to source components from alternative vendors.
“As long as the name of Honda exists on the product, component sourcing can be done from the approved vendor list. Once the re-branding under Hero name happens, HHML will be free to scout for alternative vendors, if there is need,” Chirag Shah, a sector analyst with Mumbai-based brokerage firm Emkay Research, wrote in an 8 April report on Hero Honda.
The company has hired London-based branding expert Wolff Olins, as previously reported by Mint, to revamp the brand.
The new strategy is aimed at focusing on the group’s motorcycling pedigree and promoting individual brands such as Passion and Splendour.
In the recent cricket World Cup and in the ongoing Indian Premier League, the company hasn’t mentioned its name in advertisements for the Karizma and the Hunk on billboards or at cricket grounds.
“Honda has a lot of cachet in the Indian market. Hero will, hence, have to do a fair bit of work,” said Arvind Sharma, chairman and chief executive, Leo Burnett India Pvt. Ltd. “From a mass perspective, it’s critical that the new brand communicates that the firm has technology to make a motorcycle that meets international standards.”
He said this will be governed by a series of elements, which includes a new brand identity, new philosophy and models rolled out by Hero.
The Hero Honda board also decided to spend Rs.250 crore on capacity expansion, said the first person cited above. However, a part of the amount will also be utilized for the fourth plant, a decision on which is yet to be taken.
“Production capacity increased through debottlenecking. Current capacity stands at 6.2 million. There is further scope of debottlenecking. The company is aiming for 10% volume growth in FY12,” Shah wrote in his report.
The company has ample scope for expanding capacity at its plants. “We have been gradually ramping up capacity,” said another person familiar with company affairs on condition of anonymity. “A lot of debottlenecking is being done, especially at the Haridwar plant.”
Ajay Shethiya, analyst at brokerage Centrum Broking Pvt. Ltd, expects growth in the two-wheeler industry to taper off and reach the historical levels of 12-13%.
According to him, Hero Honda’s expansion plan is in line with demand and should see it through till the new plant comes up. The company ended the fiscal by selling 5.4 million vehicles as against 4.6 million a year ago.
In a circular issued to the Bombay Stock Exchange on Wednesday, the company declared an interim dividend of Rs.70 per share, causing the stock to surge 5.86% to Rs.1,735.10. The benchmark Sensex rose 2.25% to 19,696.86 points.
While Hero Group has already announced the transaction details of the deal, a formal closure will happen in the third week of July.
On Wednesday, Hero Honda appointed Toshiyuki Inuma non-executive additional director with effect from 13 April. Inuma is also a general manager of Honda’s motorcycle operations in India.
“He is just there to oversee the monetary transaction. He will step down on 19 July,” said the first person cited in the story.