A sudden outbreak of news surged in the camp of Honda, revealing that it may peel off 20% share of Hero Honda to the benefit of Munjals. There is an unconfirmed reports that negotiations are on in Japan between Hero corporate and another equity company KKR in this regard. The report indicated that Munjals may receive a minimum 20%share from Honda with KKR receiving 6%. However, such reports are negated by Honda Motors. Consequent to the hoax, the index of Honda witnessed a fall by 7% at Rs1714.90 (< by Rs76.10 at 4.25%) making the closing rate to Rs1669.90. This reversal made a the counter turn over amounting 5.56 lakh shares.
Hero Honda directs its status to the keen sense portrayed in the rural sector of India and the perfect dealer/service network. The company has 3500 customer touch points including dealers, service centres and stock points. There are two manufacturing facilities, in Gurgaon and Dharuhera, with global standards. The third and full-fledged facility at Haridwar is just one year old. Hero Honda’s sale figure for the Q1 of 2010-11 is up by 10.28% at a sale of 12,34,039 units against 11,18,987 units in the corresponding period of last year. The back up from Honda is coming by way of an investment of Rs530 crore for the expansion activities and erection of a
new plant in Rajasthan during 2011-12.