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GERMAN carmaker Daimler is selling its 5.34% stake in Tata Motors to raise up to Rs 2,000 crore ($429 million), people familiar with the matter said. Daimler was offering 2.56 crore shares in India’s largest vehiclemaker at Rs 737.4-761.3 each.  

   Daimler owns 5.34% of Tata Motors’ ordinary shares and 4.71% on a fully diluted basis. Tata Sons which has the first right of first refusal has agreed to the stake sale to a third party, sources said.

   A Daimler official declined to comment on the reported share sale and a Tata Motors spokesperson did not have any comment. Citigroup is handling the share sale in Tata Motors.

   Daimlers stake in Tata Motors over the years has fallen from 10% to 5.34%, and the German company currently had no plans to revise its equity stake and continued to remain as a dormant investor. Shares in Tata Motors have risen 19% since February 26 when the company posted a consolidated net profit for the second straight quarter as sales of its luxury brands Jaguar and Land Rover recovered.

   The Stuttgart-based company, which entered into collaboration with Tatas in 1954 had an alliance for the Benz technology for trucks. In 2008, Daimler entered into a 60:40 joint venture with the Hero group for manufacturing 70,000 trucks every year by 2010. The Munjals of Hero Group pulled out a year later due to poor performance of the commercial vehicle segment. Daimler bought out Hero’s 40% stake in Daimler Hero Motor Corp for Rs 106 crore and said it would invest another Rs 4,600 crore over four years by saying it would go alone and will use India as a “bridgehead to enter other emerging markets.”

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