Some big name investors like LIC, Parag Parikh AMC, WGI global have invested in Hero Motocorp.
Additionally, the company is regularly audited by BSR and co LLP apart from regular public scrutiny.
Finally, the company or its promoters have never been in any controversy before this came up.
But, Hero Motocorp is fighting a losing war where its no.1 ranking in market share is shrinking. Also, Hero has been extremely slow to bring in new products to the market. It’s profit margins have been squeezed very much off late. Their electric scooter is also delayed by a couple months.
POssible reasons why IT raids happened are
- They have been wanting to launch their EV which is not in the interest of Hero Electric. Hero Electric is making lots and lots of noise effecting the Munjal family name. Also, Hero Electric has been dragged to court by Honda for design infringement. With Ola and Ather racing the sales charts, It is but time that Hero Electric, just like Hero moto loses its no.1 ranking.
- Hero motocorp recently declared its intention of listing Hero Fincorp. Vested interests maybe at play here.
- Political conflicts or disagreements.
In India, IT raids regularly used as a weapon for attacking a person or a company’s reputation. How Mr. Pawan Munjal and Hero Motocorp react to this new will decide the future course of action.
Another small bad news is also doing the rounds.
First the family EV issue, then the IT raids and then the small bad news of litigation with Brains Logistics. Hero can make a comeback like Infosys did in 2019 which is only possible with the highest levels of corporate governance standards.