Daimler AG (DAI) has completed its exit from Tata Motors Ltd. (500570.BY), India's largest auto maker by revenue, by selling its 5.34% stake in the company, as the German vehicle manufacturer prepares to go it alone in the rapidly growing Indian market for trucks.

"Tata Motors and Daimler AG have a relationship that goes back over 50 years but now the German company is exiting its stake as it is now solo in India," a banker involved in the deal, who didn't wish to be named, told Dow Jones Newswires.

He said the price band was between around INR730-INR760 a share. That values the 5.34% stake at INR18.69 billion ($410.5 million) on the lower-end of the price band.

"The pricing is being done at a discount of between 4.5%-7.5% to today's closing price. The book has been covered fully but we're waiting for more bids as the terms will obviously get tightened," he said.

Shares of Tata Motors closed 0.18% up at INR796.75 on the Bombay Stock Exchange Monday. That compares with a 0.64% rise in the benchmark index.

"We are not commenting on these rumors," said Florian Martens, head of finance communications at Daimler.

Daimler, the world's largest truck maker by sales, had partnered Tata Motors in 1954 to provide its technology for trucks in India. The technology tie-up ended in 1969.

In 1994, Daimler entered into another tie-up with Tata Motors for distribution of its Mercedes luxury cars in India, which ended in 1997.

"It makes sense for the company to sell (its) stake in its competitor," a Mumbai-based analyst, who didn't wish to be named, said. "Besides, the company is getting a good return on its holding in Tata Motors, which might have prompted them to exit."

Daimler is in the process of setting up a new factory in the southern Indian town of Chennai to make trucks and buses for the local and export markets, as it wants to increase its miniscule market share in the Indian commercial vehicles market.

The Indian market for trucks and buses is expected to grow at a fast pace driven by a rise in cargo volumes as well as government projects, such as the urban renewal mission.

Daimler's global truck division aims to invest more than EUR700 million in a phased manner until 2013 for a new truck and bus factory project in India.

The Stuttgart-based company has been assembling its Actros trucks since November 2007 at Pune, and has assembled buses at that site since September 2008.

Daimler's attempts to rope in an Indian partner for its commercial vehicles project failed last year, when India's Hero Group walked out of a proposed joint venture in April. Daimler bought Hero Group's 40% stake in the joint venture and said it will go ahead with the India project on its own.