Eicher Motors falls sharply: promoters reduce stake

Shares of Eicher Motors have fallen sharply on Friday, correcting by almost 4 percent on a closing basis even as broader (Sensex) market fell sharply by 300 points , thus correcting by 1.17 percent from Thursday's close.

The Friday's fall in price for Eicher Motors is due to reports of promoters selling stakes in the company to the tune of 4.2 percent, thus raising Rs. 2100 crore from sale. According to the company the sale is transacted to make available liquidity in the hands of promoters for various personal uses including portfolio and other investments and for charitable purposes. Shares were sold by Anita Lal , Rukmani Joshi and The Eicher Goodearth Trust.

The company management was quick to comment on its trust as regards future growth potential of the company; and stressed the fact that the promoters are not interested in further reducing the stakes in the company. With current stake sale of 4.2 percent the promoters now hold 50.67 percent in the company.

Eicher Motors has been doing well in terms of growth of its Royal Enfield sales. A growth of 60 percent in Royal Enfield sales in the January-March quarter has been recorded by the company and the margins are also reported at an impressive 29.8 percent during the same period.

Eicher Motors has delivered 11 percent returns over a 1 year period outperforming BSE Sensex.