Shares of Hero MotoCorp cracked 7.08 percent to close at ₹2208.35 on BSE on March 29 amid reports that the Income Tax Department found over ₹1,000 crore bogus expenses in the company's books.
As per a report by news agency ANI, the Income Tax Department has found that Hero MotoCorp made more than ₹1,000 crore bogus expenses and over ₹100 crore cash transactions for a farmhouse in Chhattarpur, Delhi.
ANI report further added that the I-T Department carried out a search and seizure operation on March 23 on Hero MotoCorp and its Chairman and Managing Director Pawan Munjal at multiple locations in Delhi NCR which concluded on March 26.
The stock plunged 9.32 percent in intraday trade but pared some losses and ended 7 percent lower, extending the losses into the third consecutive session.
"Despite the fall, the stock does not look very attractive to us in the long term mainly due to pressure on its volumes and a tepid outlook given the rise in fuel costs, slow recovery in both urban and rural markets and a 25-30 percent hike in acquisition costs of the two-wheelers since the pandemic started. However, the knee jerk reaction shown today in the stock may see some recovery tomorrow provided the management gives a satisfactory clarification to the street," said Ashwin Patil, Senior Research Analyst at LKP Securities.
Meanwhile, BSE has sought clarification from Hero MotoCorp with reference to news that appeared in ndtv.com dated March 29, 2022 quoting "I-T Department Finds 1000 Crore False Expenses Claims By Hero MotoCorp".