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Hero Motors Ltd Files Draft Papers for Rs 900-Crore IPO

• ByStartupStory     |    August 26, 2024

Hero Motors Ltd, a leading auto-components firm within the Hero Motors Company (HMC) Group, has submitted preliminary papers to the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) aimed at raising Rs 900 crore. The draft red herring prospectus (DRHP) reveals that the IPO will consist of a fresh issue of equity shares worth Rs 500 crore and an Offer-For-Sale (OFS) of shares valued at Rs 400 crore by the promoters.

The OFS will see shares worth Rs 250 crore offered by O P Munjal Holdings, with Bhagyoday Investments and Hero Cycles each selling shares worth Rs 75 crore.

Hero Motors is also considering a pre-IPO placement of Rs 100 crore. If this placement is executed, the fresh issue size will be adjusted accordingly.

Proceeds from the fresh issue to the tune of Rs 202 crore will be used for debt payment, Rs 124 crore for purchase of equipment required for expansion in capacity of the company’s facility in Gautam Buddha Nagar, Uttar Pradesh.

Hero Motors is a prominent player in the automotive technology sector, specializing in the design, development, manufacturing, and supply of high-engineered powertrain solutions. The company serves automotive OEMs in the United States, Europe, India, and the ASEAN region. Its product lineup includes both electric and non-electric powertrains for a variety of vehicles, such as two-wheelers, e-bikes, off-road vehicles, electric and hybrid cars, and heavy-duty vehicles.

Hero Motors operates in two segments: powertrain solutions and alloys and metallics. It boasts six manufacturing facilities across India, the United Kingdom, and Thailand. For the fiscal year 2024, the company reported revenue from operations of Rs 1,064.4 crore.

ICICI Securities, DAM Capital Advisors, and JM Financial are acting as the book-running lead managers for the IPO.

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