New Delhi: Eicher Motors Ltd (EML) on Friday said that three of its promoters have sold 4.2% of the company’s equity shares to raise Rs.2,100 crore.
Reacting to the news, shares of Eicher Motors fell 3.82% toRs.18,995.75 apiece on Friday, while the benchmark index Sensex was down 1.17% to 25,489.57 points.
“This sale has been done to provide liquidity to the promoters, and the proceeds will be utilized for personal uses, such as portfolio and other investments, and for charitable purposes,” the company said in a statement. The promoter group will continue to hold 50.67% stake in the firm.
“The promoters intend to maintain a majority share in EML, and do not plan to sell any further shares in the foreseeable future,” the statement added.
To be sure, EML board in March approved payment of interim dividend of Rs.100 per equity share of Rs.10 each for fiscal 2016. EML follows a calendar year (January-December) for accounting.
Among those who participated in the share sale are Anita Lal, mother of company chief executive and managing director Siddhartha Lal; Rukmani Joshi, Lal’s sister; and the Lal-family governed The Eicher Goodearth Trust.
Prior to the recent divestment, six members of the New Delhi-based Lal family, three family-governed trusts and a subsidiary held 54.87% in the company.
Those who have not participated in Friday’s sale include: Siddhartha Lal, Simran Lal, wife of Siddhartha; Tara Lal, sister of Siddhartha; Vikram Lal, Siddhartha’s father.
The three trusts who also did not divest their stake are The Simran Siddhartha Tara Benefit Trust, which holds the highest stake in the firm at 25.04% and its trustee is Vikram Lal; The Brinda Lal Trust that holds 1.79%, and Eicher Goodearth Pvt. Ltd that holds 0.06% in the firm.
In the statement, Siddhartha Lal said that his company has had standout success and it continues to have “huge growth potential… in its domestic and overseas markets”.
“I am excited to continue to steer EML’s next phase of growth,” he added.
Apart from making trucks and buses, EML is famous for its iconic Royal Enfield motorcycles.
Mint in August reported Royal Enfield’s plans to become a key player in the market for middle-weight motorcycles worldwide.