Mumbai: Stocks of Hero MotoCorp Thursday fell by nearly 4 percent after US-based Erik Buell Racing, in which the two-wheeler giant had a substantial stake, filed for bankruptcy -- a development that may affect the Indian firm's plans in the American markets.
The stock dropped 3.76 percent to settle at Rs 2,428.85 on the BSE. During the day, it tumbled 4.31 percent to Rs 2,415.
On the NSE, shares of Hero MotoCorp fell by 3.74 percent to Rs 2,430.10.
Following the decline in the stock, the company's market valuation dipped by Rs 1,896.9 crore to Rs 48,501.10 crore.
Hero had acquired 49.2 percent stake in EBR in 2013 for USD 25 million (about Rs 148 crore) and had plans to market its products in the US through the EBR network.
Hero MotoCorp said in a statement that Erik Buell Racing and its subsidiary Erik Buell Racing LLC have filed an Assignment for Benefit of Creditors under Chapter 128 of the Wisconsin Statutes, which is similar to the federal bankruptcy law of the US, and have ceased their operations.
Hero had made the acquisition as part of its strategy to enhance technological prowess, post the break-up of its joint venture with Honda.
The company had earlier entered into a technology sourcing pact with EBR in 2012 to strengthen presence in the high-end bike segment.
Hero MotoCorp, however, maintained that the closure of EBR would not impact its R&D and future product line up.
In the stock market, the BSE benchmark Sensex ended at 28,666.04, down 133.65 points.
