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Updated: July 01, 2025 07:35
Road to the Bourses Hero Motors, the group's bluechip automobile components business, has officially filed draft papers for its highly anticipated initial public offering. The IPO is a strategic combination of new equity and offer-for-sale, symbolizing growth plans along with the exit of shareholders. Led by marquee names like JM Financial, DAM Capital, and ICICI Securities, the firm is ready for a high-octane listing on Indian bourses.
IPO Size and Objective The issue size is determined at ₹12,000 crore with a mix of fresh capital infusion and promoter offloading.
Key Breakdown:
New share issue of up to ₹8,000 crore
Offer-for-sale (OFS) by existing shareholders of ₹4,000 crore
Promoters who sell stakes are OP Munjal Holdings, Hero Cycles, and Bhagyoday Investments
Proceeds from the issue shall be utilized for working capital, debt repayment, and capacity building at the Gautam Buddha Nagar plant
Strategic Drivers for IPO Hero Motors aims to become a global auto-tech powerhouse with leadership in electric and non-electric powertrain solutions.
Growth Drivers:
International customers are BMW, Ducati, Formula Motorsport, and Enviolo
Suggestions for investment in world-class production and R&D capability
Aims to retire debt and improve operating effectiveness following listing
Financial Dashboard While revenue has been steadily enhancing, profitability has been under pressure due to rising costs and operational headwinds.
Performance Snapshot:
FY24 revenue: ₹1,064 crore, up from ₹1,054 crore in FY23
Net profit: ₹17 crore in FY24, versus ₹40.5 crore in FY23
EBITDA margin dipped to 6% despite raw material prices decreasing
Losses moderated to ₹255 crore in FY24 from ₹428 crore in FY23 Market Position and Outlook Hero Motors is counting on India's EV initiative and global OEM demand to fuel its next wave of growth.
Competitive Advantage:
One of India's leading providers of powertrain components
Strong export presence in Europe and the US
Well positioned to benefit from the global shift towards sustainable transport
Final Lap With the IPO filing made public, Hero Motors will shortly make its offer, subject to approval by SEBI. Listing will not only unlock value for existing investors but also provide the company with the financial oomph to scale up its plans in the global auto-tech arena.
Sources: Moneycontrol, Business Today, IPO Watch, Reuters, Economic Times, Hero Motors DRHP summary
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