SEBI approves Rs.1,200 crore IPO of Hero Motors
The company will utilize the funds for repayment of debt and expansion plans
According to the draft red herring prospectus (DRHP), Hero Motors has received approval from the Securities and Exchange Board of India (SEBI) to proceed with an initial public offering (IPO).
The auto component manufacturing company aims to raise Rs.1,200 crore through its maiden public issue.
The mainline offering comprises a fresh issue of Rs.800 crore and an offer for sale (OFS) of Rs.400 crore. The latter will include Rs.390 crore worth of shares offloaded by OP Munjal Holdings, and Rs.5 crore each by Bhagyoday Investments and Hero Cycles.
The firm has reserved 50 percent of the issue for qualified institutional buyers (QIBs), 35 percent for retail investors and 15 percent for non-institutional investors (NIIs).
The company will utilize Rs.285 crore from the net fresh issue proceeds for repayment of debt availed by the company and Rs.237 crore for purchasing equipment to expand its Gautam Buddha Nagar, Uttar Pradesh, facility. The remaining funds will be used for funding inorganic growth through unidentified acquisitions, strategic initiatives, and general corporate expenses.
While Kfin Technologies is the registrar of the issue, ICICI Securities, DAM Capital Advisors, and JM Financial are the book-running lead managers (BRLMs).
For nine months ended 31 December 2024, Hero Motors reported revenue from operations of Rs.807.2 crore and profit after tax (PAT) of Rs.22.39 crore.
In FY 2024, the company’s revenue was Rs.1,064.3 crore, compared to Rs.1,054.6 crore in the previous financial year. Its net profit was Rs.17 crore, down 58 percent from Rs.0.5 crore in FY 2023.
About Hero Motors
Hero Motors designs, develops, manufactures and supplies highly engineered powertrain solutions. It caters to automotive original equipment manufacturers (OEMs) in India, the United States, Europe, and the Association of Southeast Asian Nations (ASEAN) regions. It offers comprehensive solutions, including services for designing, prototyping, validating, developing, and delivering system-level and component-level solutions for electric and non-electric powertrains.
Its offerings find application in two-wheelers, performance automotive, electric-bikes, off-road vehicles, electric and hybrid cars, heavy-duty vehicles, and electric vertical take-off and landing (eVTOL) categories. The company’s global customers include BMW AG, Ducati Motor Holding SPA, Enviolo International Inc, Formula Motorsport, HUMMINGBIRDEV Inc, HWA AG, leading global e-bike manufacturers, and mobility applications, such as aerospace.