Bain Selling Its Stake In Hero MotoCorp

By Ajinkya

Published: Friday, June 13, 2014, 17:32 [IST]

India's largest manufacturer of two-wheelers Hero MotoCorp has a few private equity firms that have stakes in the company. One of the private equity firm Bain Capital India Pvt. Ltd has 8.6% stake in Hero MotoCorp.

Bain Capital India Pvt. Ltd, has decided to sell half of its stake. They will selling 4.29% stake which it holds in Hero MotoCorp at a price of INR 2,330 crore. They own exactly 8.57 million shares and will be selling half of it.

Brij Mohan Lall Om Prakash, the investment arm of the Brijmohan Lall Munjal-led Hero Group told source, "Bain Capital has been an investor in Hero MotoCorp for over three-and-a-half years now."

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He further added, "Typically financial investors like Bain Capital have a 3-5 year investment horizon and Bain has decided to partially monetise their investment now."

The new investors will also have to cough up a brokerage commission of 0.25 percent. They will also have to pay separately securities transaction tax and service charges. The deal will come to an end in three months from friday.

Citigroup Inc. will be incharge of the transactions, they have decided to price each share in the range of Rs 2582 to Rs 2717. The price includes a discount of five percent since the closing price on thursday.

Paul Edgerley, Bain Capital Llc's Managing Director said, "We target somewhere in the mid-20s kind of IRRs (internal rates of return) for any investments in that range. So it depends on how long we are going to hold the investments." He further added, "So it could be two-and-a-half times the money in four-five years."

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