Ashok Leyland increases stake in Hinduja Leyland Finance

The board of directors of Ashok Leyland, in a meeting, approved to acquire up to 6.99 per cent equity shares of Hinduja Leyland Finance Limited (HLFL) from existing shareholders in HLFL.

Previously, the board had approved Ashok Leyland to acquire up to 19 per cent equity shares in Hinduja Leyland Finance Limited (HLFL) from existing shareholders in HLFL, in tranches for a consideration not exceeding Rs 1,200 crore. Read here:

https://www.dsij.in/DSIJArticleDetail/ArtMID/10163/ArticleID/12041/Ashok-Leyland-raises-stake-in-HLFL-hits-fresh-52-week-low

However, in the recent meeting, a decision was taken to restrict the acquisition of shares by Ashok Leyland to 6.99 per cent of the paid-up capital of HLFL, at a price of Rs 119 per share, which aggregates to Rs 390.49 crore from Everfin Holdings (an affiliate of Everstone Capital) and Hinduja Group, who had purchased the initial tranches of HLFL shares from Everfin. This arrangement has allowed Ashok Leyland to acquire, both directly and indirectly, the residual 6.99 per cent stake of Everfin at a price of Rs 119 per share. Post completion of the transaction, Ashok Leyland’s stake in HLFL will increase by 6.99 per cent to 61.83 per cent from its previous 68.82 per cent. For Ashok Leyland, HLFL is a very significant subsidiary for financing its vehicles like all OEMs in the auto sector.

Despite the development, on Monday, the stock of the company dipped by 18 per cent or Rs 7.90 per share and closed at Rs 36. The 52-week high is Rs 97.70 and 52-week low is Rs 34.10 on BSE.