The stock dropped 3.76 per cent to settle at Rs 2,428.85 on the BSE. During the day, it tumbled 4.31 per cent to Rs 2,415.
On the NSE, shares of Hero MotoCorp fell by 3.74 per cent to Rs 2,430.10.
Following the decline in the stock, the company's market valuation dipped by Rs 1,896.9 crore to Rs 48,501.10 crore.
Hero MotoCorp said in a statement that Erik Buell Racing and its subsidiary Erik Buell Racing LLC have filed an Assignment for Benefit of Creditors under Chapter 128 of the Wisconsin Statutes, which is similar to the federal bankruptcy law of the US, and have ceased their operations.
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Hero had made the acquisition as part of its strategy to enhance technological prowess, post the break-up of its joint venture with Honda.
Hero MotoCorp, however, maintained that the closure of EBR would not impact its R&D and future product line up.
In the stock market, the BSE benchmark Sensex ended at 28,666.04, down 133.65 points.