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Hero honda slips in Stock market due to JV breakup......

Created by : Jyoti Rath, Sr. Associate, Barclays  | 12 06 2010 07:28:27 +0000
Industry : Equity Research/AnalyticsFunctional Area : India(Markets)
Keywords : stock market indian stock market hero honda hero and honda jv break up joint venture break up
Activity:  667 views;  last activity : 12 10 2010 14:22:00 +0000

Shares in Hero Honda Motors, India's largest motorcycle manufacturer, fell nearly 5 per cent early on Monday on reports that Honda had agreed to exit its stake in the joint venture.  Honda and its Indian partner Hero Group will seek approval for the breakup from their respective boards of directors later this month.

Do you think investors will go for Hero stocks after the JV splitup with Honda?? Share your thoughts on this.....

  
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While agreeing your point of views, it is also a premature conclusion.In case the Hero groups is able to maintain the status quo after the break-up with Honda, there is a chance to regain its reputation. However it all depends upon the strategic move that will be implemented by the Hero groups. let us wait and see. Thanks for the referral Ms.Jyoti Rath.
By NATTERAJA R. ARIKRISHNAN, GM-Projects, Bentec Electricals & Electronics Pvt. Ltd  12 06 2010 17:08:53 +0000
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Dear Jyothi, What we are witnessing is the immediate first reaction of market which is always such.What Hero might have on its sleeve as future plan will only unfold at a later stage. So, feel it is premature to comment.The investor can once again rush back at first positive indication, you would agree. Yet the company can obviously not defer long time strategy scared of short term reactions.
By Ravindra Sharma, Managing Consultant, CHEF-India  | 12 11 2010 06:56:57 +0000
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it's just start....H.H. also fails in many areas to give proper feedback and service to it's customers and after JV breakup they are in big trouble.
By Vinod kumar, MBA (Finance) student, Punjab College of Technical Education  | 12 10 2010 14:22:00 +0000
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This JV is one of the long lasting JVs after Maruti-Suzuki in the Automobile industry. Since, Honda on its own is trying to improve its market share with its own products in the two wheeler arena, this split is inevitable. Hero Honda is the leading player in the two wheeler market till now. As Mr. Ravindra sharma told, we are witnessing the first and immediate reactions of market. This split will have some impact, but this depends how Hero on its own could sustain the competition and stabilize its position.
By Srinivas suravajhala, Asst. Manager.  | 12 10 2010 09:56:51 +0000
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If the Hero Group is able to still do well despite Honda exiting the joint venture, the investors will still go for the Hero stocks....

Thanks for the referral, Natteraja.....
By Badri N Srinivasan, Head - Quality, Valtech India Systems Pvt. Ltd.  | 12 10 2010 08:23:08 +0000
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Natteraja I am in agreement with you on your point of view.
By Rathin Deb, Advisor and retail consultant, currently as Branch Manager, Tower Infotech Ltd  | 12 08 2010 06:51:45 +0000
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No, I think its a big setback for both....Institutional investors are uneasy about the fact that the Hero group is likely to sell Honda’s 26% holding to private equity investors at a premium to the purchase price but below the market price, say people familiar with the thinking of the shareholders. Institutional investors will protest if the price of the stake sale is at a discount to the current market price. There is also talk about increase in the royalty to Honda. Both these steps are not good for minority shareholders. So its not a good thing for Hero as a single company....investors will be apprehensive about these stocks....
By Jyoti Rath, Sr. Associate, Barclays  | 12 06 2010 07:28:27 +0000
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