Hero Motors refiles papers for IPO, ups issue size

Hero Motors, an auto components maker helmed by Pankaj Munjal, a first cousin of Hero MotoCorp's chairman Pawan Munjal, has refiled its Draft Red Herring Prospectus (DRHP) with capital markets regulator SEBI for an initial public offering (IPO).

Hero Motors has increased the issue size from ₹900 crore to ₹1,200 crore.

The IPO with a face value of ₹10 is a mix of fresh issue of up to ₹800 crore and an offer for sale up to ₹400 crore by promoters. The OFS includes ₹390 crore worth shares by O P Munjal Holdings, and ₹5 crore each by Bhagyoday Investments and Hero Cycles each, according to the DRHP.

The company will utilise proceeds from the fresh issue of shares worth ₹285 crore for repayment, prepayment, and redemption in full or in part, of certain outstanding borrowings availed by it. Additionally, ₹237 crore will be used for capital expenditure through purchase of equipment required for expansion in capacity of its Gautam Buddha Nagar, Uttar Pradesh facility.

The capital raised will also be used for funding inorganic growth through unidentified acquisitions and other strategic initiatives and general corporate purposes.

Hero Motors, in consultation with the book-running lead managers, may consider a pre-IPO placement of ₹160 crore. If such placement is completed, the amount will be reduced from the fresh issue.

About 50% of the offer has been reserved for qualified institutional buyers, 15% for allocation to non-institutional bidders and and the rest 35% for retail individual investors.

In August 2024, the company had filed papers for a ₹900 crore IPO.

As of now, the promoters hold a 91.65% stake in the company. Hero Motors manufactures engine and transmission components for two-wheelers and has a global clientele that includes brands such as BMW, Ducati, and Harley-Davidson.

As of December 31, 2024, it operated six manufacturing facilities spread across India, UK and Thailand that are strategically located to ensure proximity to customers and cost competitiveness.

ICICI Securities, DAM Capital Advisors, and JM Financial are the book-running lead managers to the issue and KFin Technologies is the registrar to the offer.