Hero Motors, leading auto-components company backed by South Asia Growth Invest and part 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 Rs 900 crore through an initial public offering (IPO).
The IPO will feature a fresh issue of equity shares worth up to Rs 500 crore and an Offer-For-Sale (OFS) of up to Rs 400 crore by promoters. The OFS includes Rs 250 crore worth of shares from O P Munjal Holdings and Rs 75 crore each from Bhagyoday Investments and Hero Cycles.
The company may also pursue a pre-IPO placement of Rs 100 crore, which would reduce the fresh issue size.
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. The remaining funds will be used for general corporate purposes.
Hero Motors specialises in advanced powertrain solutions for automotive OEMs globally, including in the US, Europe, India, and ASEAN.
Its product portfolio encompasses both electric and non-electric powertrains for vehicles ranging from two-wheelers to heavy-duty vehicles and eVTOLs. The company operates in two segments: powertrain solutions and alloys and metallics, with six manufacturing facilities across India, the UK, and Thailand.
In FY24, Hero Motors reported a revenue increase of 0.9%, reaching Rs 1,064.4 crore. The company has recently expanded its international footprint through strategic acquisitions and joint ventures, including a stake in British company Hewland and a partnership with Yamaha Motors Japan.
ICICI Securities Limited, DAM Capital Advisors Limited, and JM Financial Limited are the book-running lead managers for the IPO.
