"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," Hero MotoCorp said in a statement.
According to information available with BSE, the promoter stake in Hero MotoCorp stood at 39.92 per cent at the end of December 2014.
Following the sale, the over USD 5 billion Hero Group still holds a significant stake of over 36 per cent in the company, the statement added.
Elaborating on the funds' use, the company said: "The Group will use the sale proceeds to fund new growth avenues available through the government's 'Make in India' initiative."
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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.
On focus on its core business, the company said: "The Hero Group remains strongly committed to its core two-wheeler business, where it sees enormous potential, both in India and overseas."
The company's shares were trading 4.79 per cent down at Rs 2,671.75 apiece during afternoon session on the BSE.