Hero Motors Revs Up IPO Plans, Refiles Papers with Bigger Issue Size

In order to earn INR 1,200 crore through an initial public offering (IPO), Hero Motors has resubmitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI), the market regulator.

 For both electric and non-electric powertrains, Hero Motors offers a broad range of solutions, including system-level powertrain design, prototype, validation, development, and delivery.

It has a major first-mover advantage in this industry since it was one of the first Indian companies to take advantage of the worldwide e-bike powertrain market opportunity. The company operated six production facilities in Thailand, the United Kingdom, and India as of December 31, 2024.

These facilities were positioned strategically to ensure cost-effectiveness and closeness to consumers.

Recent Financial Outlook of Hero Motors

Hero Motors earned INR 807.26 crore in the nine months before December 31, 2024, and its operational revenue increased from INR 914.19 crore in fiscal 2022 to INR 1,064.39 crore in fiscal 2024.

Furthermore, with a compound annual growth rate (CAGR) of 22.08%, gross profit increased from INR 281.38 crore in fiscal 2022 to INR 419.37 crore in fiscal 2024, reaching INR 330.47 crore in the nine months that concluded on December 31, 2024.

The profit after tax for the nine months ending December 31, 2024, was INR 22.39 crore, up from INR 17.04 crore in the fiscal year 2024.

Planning for the IPO

With a face value of INR 10, the initial public offering (IPO) consists of an offer for sale (OFS) by the promoters of up to INR 400 crore and a new issue of stocks worth up to INR 800 crore.

O P Munjal Holdings shares valued at INR 390 crore and Bhagyoday Investments and Hero Cycles shares valued at INR 5 crore each are included in the OFS. The following is how the money received from the new share offering will be distributed: INR 285 crore will be used to pay back, prepay, or fully or partially redeem some of the company's outstanding debts.

Further, INR 237 crore will be used to finance potential acquisitions and other strategic projects. Lastly, INR 285 crore will be used for capital expenditures associated with buying equipment required to increase the capacity of the company's facility in Gautam Buddha Nagar, Uttar Pradesh.

The issue's book-running lead managers are ICICI Securities Limited, DAM Capital Advisors Limited, and JM Financial Limited; the offer's registrar is KFin Technologies Limited.

In 2022, Hero Motors purchased a strategic interest in the British company Hewland from Hero International B.V., which had been connected to Hewland since 2017.

In 2021, it formed a joint venture with Yamaha Motors Japan to produce electric motors under the "HYM" brand, and operations started in 2022. It also entered the micro-mobility electric drive unit ("EDU") market in 2023 under the "ESYNC" brand.