While the largest company in the two-wheeler segment, Hero Honda has denied the reports of Hero buying the stake of Honda in its JV but as they say, there is no smoke without the fire.

And perhaps, there is a lot of fire in this issue. It has been learned from the sources that the Munjal family has already set up a special purpose vehicle (SPV) in order to acquire Japan's Honda Motor's 26% stake.

If the deal goes through between the duo, it will take Hero's stake up to 51%. It is to be mentioned here that the MD of the company has recently said that the two companies will continue to work together.

On the other end, Honda has also denied the exit from the JV. Clearly, defending a 48% market share in the Indian two-wheeler segment by no means will be cake walk for Hero Honda and hence the company will face a lot of challenges in terms of its market leadership in times to come.

However, for now, sources confirm that the home grown Hero Group and the private equity giant KKR are in talking terms to pick up close to 6% of the effective stake with the latter negotiating for a larger share.