Report: India's Hero Honda piques PE interest

TPG, KKR, The Carlyle Group and Bain Capital are reportedly competing for a stake in the motorcycle manufacturer.The deal is potentially worth over $1bn.

Four private equity suitors, TPG Capital, The Carlyle Group, Kohlberg Kravis Roberts and Bain Capital, are vying to acquire a minority stake in India’s Hero Honda, according to a Bloomberg report.

The report, citing five unnamed sources, noted that two of the funds may make a joint bid to purchase about 15 percent of the company, which is a joint venture between Japanese automaker Honda and India’s Hero Group, from Honda. The deal could be worth around $1.1 billion, the report added.

TPG, Bain and the Carlyle Group declined to comment. KKR did not comment by press time.

Hero Honda is India’s largest motorcycle maker, with manufacturing sites across three facilities in Gurgaon, Dharuhera and Haridwar. It sold 4.4 million vehicles last year. Bloomberg cited three of its sources as saying that Honda had been in talks with the Hero Group to dilute its 26 percent stake in the joint venture for “more than a year”. 
Despite Honda's apparent withdrawal, Indian assets are looking increasingly attractive to Japanese investors. Just last month, Tokyo-based Mizuho Securities kicked off a joint venture with Tata Capital, the financial services arm of Tata group, to raise a mid-market growth fund targeting $500 million for investing in the country’s healthcare, special situations and “innovation” sectors, a company spokesman told PEI Asia then.

In June, private equity firms SAIF Partners and Peepul Capital sold their shares in Indian information technology company Intelligroup to Japan-based NTT Data for about $199 million in an all-cash tender offer.