Hero Honda announces realignment of Munjal family stake in the company

NEW DELHI: Hero Honda -- a joint venture between the Munjals and Japan's Honda Motor Co -- on Monday announced a realignment in the ownership of stake of its Indian promoters' holding in the country's largest two-wheeler maker.

The Munjals and Honda hold a 26 per cent stake each in Hero Honda and the rest is held by the public and financial institutions. Following a family settlement agreement of the Indian promoters, Brijmohan Munjal and his sons will now hold the stake as Indian promoters in the company.

In a filing to the Bombay Stock Exchange, Hero Honda said in view of the family settlement agreement, the Indian promoters -- Hero Investments Pvt Ltd (HIPL), Bahadur Chand Investment Pvt Ltd (BCIPL) and Hero Cycles Ltd (Hero Cycles) -- have realigned their shareholding in the company.

"In view of the same, Hero Cycles had transferred its holding in the company to HIPL. Consequently, the Indian promoter group of the company now comprises of HIPL and BCIPL, owned and controlled entirely by the Munjal family headed by Brijmohan Lall Munjal, chairman of the company," it added.

Earlier last month, an agreement to divide the Hero Group was reached, based on a simple principle of ending the numerous cross holdings between the families of B M Munjal and his three brothers -- OP Munjal, Satyanand Munjal and the late Dayanand Munjal.

The Hero Group, which officially came into existence in 1956, had started its activities in the early 1940s as a bicycle-maker run by the four brothers.

The group currently has over 20 firms, most of which are related to the two-wheeler industry.

After the family settlement, Hero Honda, Hero Corporate Services, Rockman Cycles Industries, Hero Mindmine Institute, Easy Bill and Hero Management Service is going to the family of BM Munjal.

Satyanand Munjal's family is getting Munjal Showa, Munjal Auto, Highway Industries, Majestic Auto and Satyam Autotech.

Other entities such as Hero Cycles, Hero Motors and Munjal Sales Corporation are earmarked for OP Munjal, while members of the late Dayanand Munjal's family, represented by his son Vijay Munjal, will now be the owners of Hero Exports, Hero Electric, Hero Cycles (Unit II) and Sunbeam Auto.

The Munjals' quiet settlement is in contrast to the bitter separation saga of some of India's prominent business families, like the Ambanis and Bajajs.