"In a major initiative towards diversification into fast growth areas, the BML Munjal-led Hero Group has divested seven million equity shares in its flagship company Hero MotoCorp Ltd," Brij Mohan Lall Munjal-led Hero Group said in a statement.
Following the sale of seven million equity shares, the over USD 5 billion Hero Group still holds a significant stake of over 36 percent in the company, the statement added.
According to information available with BSE, the promoter stake in Hero MotoCorp stood at 39.92 percent at the end of December 2014.
While, the group did not to share the details of the transaction, based on the closing price of Rs 2,663.45 per scrip of Hero MotoCorp on BSE today, the transaction would be value at approximately Rs 1,864 crore.
Officials of the group declined to share details of the transaction but sources said "it is worth over Rs 1,800 crore".
Elaborating on the funds' use, the statement said: "The group will use the sale proceeds to fund new growth avenues available through the government's 'Make in India' initiative."
The Prime Minister's 'Make in India' platform has opened up new vistas, some in very high growth areas, and the Hero Group -- with its experience, scale of operations and brand equity -- is uniquely placed to leverage these emerging opportunities, it said.
Reiterating its focus core business, the group said: "The Hero Group remains strongly committed to its core two-wheeler business, where it sees enormous potential, both in India and
Hero MotoCorp sold 6.64 million two-wheelers in 2014, including over 200,000 units in global markets.
The company's shares closed at Rs 2,663.45 apiece on the BSE, down 5.09 percent on the BSE.
In December 2010, the Hero Group and Honda had agreed to end their 26-year-old relationship, with the Indian partner agreeing to buy out the latter's 26 per cent stake in Hero Honda for Rs 3,841.83 crore.
Earlier, in March 2011, two private equity firms, BC India Investors II and Lathe Investment Pvt Ltd, together picked up a 29 percent stake in Hero Investments Pvt Ltd (HIPL) — a promoter firm of the country's largest two-wheeler maker for Rs 3,650 crore.
The group had said the funds raised from the PE firms will be used to retire a significant portion of the debt that has been raised by HIPL for financing the acquisition of Honda Motor Company's stake in Hero Honda.