Hero Motors, the flagship auto-components arm of the Hero Motors Company (HMC) Group, has submitted a draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) to raise Rs 900 crore through an initial public offering (IPO).
According to the DRHP, 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 company’s promoters. The OFS will see promoter OP Munjal Holdings offload shares worth Rs 250 crore, while Bhagyoday Investments and Hero Cycles will each sell shares worth Rs 75 crore.
Currently, OP Munjal Holdings holds a 71.55% stake in Hero Motors on a fully diluted basis, with Bhagyoday Investments and Hero Cycles holding 6.28% and 2.03%, respectively. South Asia Growth Invest LLC, an investor in Hero Motors, holds a 12.27% stake.
The company, backed by South Asia Growth Invest, filed the DRHP with SEBI on August 23. ICICI Securities, DAM Capital Advisors, and JM Financial are serving as the book-running lead managers for the IPO.
Hero Motors is also considering a pre-IPO placement of Rs 100 crore before submitting the Red Herring Prospectus to the Registrar of Companies (ROC). If this placement materializes, the funds raised will reduce the allocation for general corporate purposes from the fresh issue.
Hero Motors, one of India’s leading automotive technology firms, specializes in powertrain solutions—both electric and non-electric—for automotive original equipment manufacturers (OEMs) across the United States, Europe, India, and the ASEAN region. The company’s clientele includes global names such as BMW AG, Ducati Motor Holding SPA, Enviolo International Inc, Formula Motorsport, HUMMINGBIRD EV Inc., HWA AG, and top-tier electric bicycle manufacturers.
For the fiscal year ending March 2024, Hero Motors reported a net profit of Rs 17 crore, reflecting a 58% decline from the previous year’s profit of Rs 40.5 crore. The company’s revenue for the year stood at Rs 1,064.4 crore, slightly up from Rs 1,054.6 crore the previous year.
