Shares of Hero MotoCorp plunged as much as 5.3% to hit an intraday low of ₹3,032.10 apiece on the BSE on Tuesday, after the Enforcement Directorate reportedly conducted raids at the company's chairman Pawan Munjal’s residence in Delhi and Gurugram today in relation to a money laundering case.

The scrip opened marginally higher at ₹3,210.05 against the closing price of the previous session at ₹3,203.45. The scrip closed 3.22% lower at ₹3,100. During the session, the company’s market capitalisation stood at ₹61,953.91 crore, with 67,821 shares exchanging hands against the two-week average of 0.20 lakh shares.

According to reports, the Directorate of Revenue Intelligence (DRI) recently apprehended a close aid of Munjal in relation to money laundering and the possession of undeclared foreign currency. Notably, last month, the ministry of corporate affairs initiated an investigation against the country's leading two-wheeler manufacturer in relation to lapses in corporate governance. Hero MotoCorp has been reportedly alleged of floating shell companies.

In March last year, the income tax department raided several premises of Hero MotoCorp and Munjal for alleged tax evasion. The government agency then said that an expenditure of over ₹800 crore made by the auto company has been booked in the guise of the purchase of services from a specific event management entity, which allegedly siphoned off the money.

Hero MotoCorp has been the world's largest two-wheeler manufacturer in terms of unit volume sales in a calendar year since 2001. So far, the company has sold more than 100 million units across domestic and international markets. The company maintains a leading position in the two-wheeler market. The two-wheeler manufacturer is present across 40 countries in Asia, Africa and South and Central America. Munjal played the quintessential role of the company’s global expansion after Hero MotoCorp’s split from Honda Motors in 2011.

In May this year, the two-wheeler manufacturer elevated Niranjan Gupta, who served as the chief financial officer (CFO) and head, strategy and M&A, as the CEO.

Last month, the company in partnership with US-based Harley Davidson forayed into the 440cc bike segment for the first time in India. The Harley-DavidsonX440 has been co-developed by both the auto giants.

In the Q4 of FY23, the two-wheeler manufacturer reported a 37% surge in net profit at ₹859 crore, as against ₹627 crore in the corresponding period of the previous year. The company’s revenue from operations jumped 12% to ₹8,307 crore as against ₹7,422 crore in the same period of the previous year.

Pawan Munjal under investigation

Hero MotoCorp shares tank 5% after ED raids Pawan Munjal's residence