As per the industry sources, the Indian unit of the Japanese auto giant Honda is ready with yet another round of fund raising which will further strengthen Honda’s position in its Indian joint venture. The Indian subsidiary of Honda is currently a joint venture between Honda Motors Corp and Siel led by Shriram family. In this round of fund raising, the company will raise a sum of about Rs 2,100 crore.
Honda’s tightening its grip in its Indian entity follows the issue related to rights in November 2011, when the Indian partner Siel stayed away from the parent company’s subscription to the Rs 1,200 rights issue. At present, Honda Motors has less than 97% share in the HSCI.
In a statement given to ET, the scion of the Shriram family, Mr. Krishna Shriram said, "There are no developments. We may even keep our stake." He added, "Our concerns are the missteps in acceptable corporate governance issues in letter and spirit by HSCI. A mature acknowledgement of this is what we would seek. Valuation methodologies and cash values are secondary issues."
The HSCIL joint venture firm came into existence in year 1995, when Japanese auto giant Honda entered in to a 60:40 partnership with Shriram Industrial Enterprise Limited.
