New Delhi: The Munjal family has bought the residual promoter stake of Sunil Munjal in Hero MotoCorp Ltd, worth around Rs.621 crore at Wednesday’s closing price, three weeks after he decided to step down as managing director in a business realignment at the Hero group.
In his capacity as a promoter, Sunil Munjal held 1,850,440 shares as of 31 March 2015, which translated into a 0.93% stake in the company, India’s largest maker of motorcycles.
“The remaining stake has been bought by the family,” said a person familiar with the development who asked not to be identified. The person declined to share further details.
A Hero Group spokesperson did not respond to an e-mail seeking comment.
Shares of Hero MotoCorp went up 1.99% to Rs.3,360.15 apiece at the close of trading on a day the BSE’s benchmark Sensex lost 0.21% to close at 28,005.37 points.
To be sure, Sunil Munjal started to sell his stake in the company in February 2015 when he sold 5.28% of the 6.21% stake he held in the company in two tranches for Rs.2,810 crore.
He received the shares as part of a family settlement in 2010, according to which the late Brijmohan Munjal, Renu Munjal (wife of the late Raman Munjal), Pawan Munjal, Suman Kant Munjal and Sunil Munjal were each given a 6.21% stake in the company.
A family trust, Bahadur Chand Investments Pvt. Ltd, also owned 8.67% in Hero MotoCorp.
Separately, Hero MotoCorp informed BSE that the promoters of the company had decided that Sunil Munjal will no longer be a promoter of the company. But he continues to hold 32,500 equity shares of the company, representing 0.02% of its issued and paid-up share capital, in his individual capacity.
“We have received a communication from the individual promoters of the company stating that pursuant to the aforesaid realignment, Mr. Sunil Kant Munjal will henceforth, not be classified as a ‘promoter’ of the company,” Hero MotoCorp informed BSE on Wednesday.
Munjal also resigned from the board of directors of the company with effect from 16 August, the company said.
Until 16 August, Sunil Munjal was Hero MotoCorp’s joint managing director.
Including the recent stake sale, Sunil Munjal may have received at least Rs.3,400 crore, which he is most likely to invest in his areas of interests such as defence and power, Mint reported on 29 July
Sunil Munjal decided to step down from his position as Hero MotoCorp’s joint managing director on 28 July.
The announcement came barely nine months after the death of Brijmohan Munjal at the age of 92 and surprised most people.
“The members of the BML Munjal family have decided to realign their businesses to achieve future growth and expansion... Sunil Kant Munjal, Joint Managing Director, Hero MotoCorp, and Chairman, Hero Corporate Service, intends to focus his time and energy on his independent and core businesses, and to pursue new business interests,” the company said in a BSE filing.
Hero MotoCorp said the realignment would not impact the overall promoter shareholding, strategic direction or operational management of the company.