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Jul 01, 2013, 06.44 PM IST | Source: CNBC-TV18

Hero Moto's $25 mn EBR stake buy to help access US mkts

Hero MotoCorp's USD 25 million stake buy of Eric Buell Racing (EBR) to help the country's largest two-wheeler maker to increase the focus on high-end premium bikes - a segment currently dominated by its Pune-based rival firm Bajaj Auto.

Hero Motocorp will be acquiring 49.2% stake in one of its technology partner firms; US based Eric Buell Racing (EBR) for USD 25 million.

The first tranche of  USD 15 million has already been invested while the remaining would be paid over the next nine months. The move marks a clear attempt by the country's largest two-wheeler maker to increase the focus on high-end premium bikes - a segment currently dominated by its Pune-based rival firm Bajaj Auto. 

Also read: Buy Hero MotoCorp, says Sudarshan Sukhani

Pawan Munjal, MD& CEO of Hero MotoCorp told reporters that post the stake acquisition, the company would get access to the US markets. "This relationship would also get extended into selling and marketing the products of both EBR as well as Hero MotoCorp, in the western market," he said.

He further added, "I am not looking at this partnership anytime in the near future to help us to get into the target of 1 million exports. That 1 million target is going to be achieved through our current products and some of the new products that we are building currently."

Hero Motocorp stock price

On July 30, 2014, Hero Motocorp closed at Rs 2601.35, up Rs 68.15, or 2.69 percent. The 52-week high of the share was Rs 2775.05 and the 52-week low was Rs 1777.80.


The company's trailing 12-month (TTM) EPS was at Rs 105.62 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 24.63. The latest book value of the company is Rs 280.43 per share. At current value, the price-to-book value of the company is 9.28.

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