Pune: Hero Motors, backed by South Asia Growth Invest and the flagship auto-components company of the Hero Motors Company (HMC) Group, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise ₹900 crore via an Initial Public Offering (IPO).
The IPO will include a fresh issue of shares worth up to ₹500 crore and an offer for sale (OFS) of up to ₹400 crore by promoters. The OFS comprises ₹250 crore worth of shares from O P Munjal Holdings, and ₹75 crore each from Bhagyoday Investments and Hero Cycles.
The company may also explore a pre-IPO placement of up to ₹100 crore in consultation with the book-running lead managers. Should this placement occur, the proceeds will be deducted from the fresh issue size.
Funds raised from the fresh issue will be allocated towards multiple objectives: ₹202 crore will be used for repayment or pre-payment of existing borrowings, ₹124 crore will support capital expenditure for the expansion of its facility in Gautam Buddha Nagar, Uttar Pradesh, with the remaining funds earmarked for general corporate purposes.
Hero Motors is recognized as one of India’s leading automotive technology companies, specializing in the design, development, and manufacturing of advanced powertrain solutions for Original Equipment Manufacturers (OEMs) across the United States, Europe, India, and the ASEAN region.
According to a CRISIL report, the company’s product offerings span electric and non-electric powertrains for a variety of vehicles including two-wheelers, e-bikes, off-road vehicles, electric and hybrid cars, heavy-duty vehicles, and electric vertical take-off and landing (eVTOL) aircraft.
Operating through two primary business segments—powertrain solutions, and alloys and metallics—Hero Motors maintains six manufacturing facilities across India, the United Kingdom, and Thailand.
The company serves a diverse clientele, including globally recognized brands such as BMW AG, Ducati Motor Holding SPA, Enviolo International Inc, Formula Motorsport, HUMMINGBIRDEV Inc, HWA AG, and other leading global e-bike manufacturers.
Notably, Hero Motors is the sole Indian manufacturer exporting continuously variable transmission (CVT) hubs to global e-bike OEMs and the only producer of integrated electric powertrain products for e-bikes in the country.
For the fiscal year 2024, Hero Motors reported revenue from operations of ₹1,064.4 crore. ICICI Securities, DAM Capital Advisors, and JM Financial are the appointed book-running lead managers for the IPO.