Hero Motors refiles IPO papers with Sebi, ups issue size to ₹1,200 cr

Auto components manufacturer Hero Motors has refiled its draft red herring prospectus (DRHP) with the capital markets regulator, the Securities and Exchange Board of India (Sebi), to list its shares on the domestic bourses. Backed by South Asia Growth Invest, the company has revised its proposed issue size to ₹1,200 crore, up from ₹900 crore in its earlier filing.

Hero Motors had originally submitted its DRHP in August 2024, but subsequently withdrew the application. The company refiled the document with the increased issue size on June 30, 2025.

The IPO is a mixture of a fresh issue of equity shares worth ₹800 crore and an offer for sale (OFS) of shares worth ₹400 crore by the promoters, according to the draft papers filed with Sebi. Under the OFS, OP Munjal Holdings will be offloading shares worth ₹390 crore, while Bhagyoday Investments and Hero Cycles will divest shares worth ₹5 crore each.

The capital raised will be used to repay debts, meet capital expenditure, and fund inorganic growth. Hero Motors intends to use up to ₹285 crore for repayment of certain outstanding borrowings availed by the company; another ₹237 crore for capital expenditure of the company through purchase of equipment required for expansion in capacity of its Gautam Buddha Nagar, Uttar Pradesh facility. A part of the capital will be used for funding inorganic growth through unidentified acquisitions and other strategic initiatives and general corporate purposes.

The company may consider a pre-IPO placement of ₹160 crore, and if such fundraising is completed, the amount will be reduced from the fresh issue.

According to the DRHP, the company has reserved half of the issue for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and the remaining 35% for retail investors.

Hero Motors is engaged in designing, developing, manufacturing and supplying highly engineered powertrain solutions, catering to automotive original equipment manufacturers (OEMs) in the U.S., Europe, India, and the Association of Southeast Asian Nations (ASEAN). It initially commenced its business operations with the manufacture of A&M components and currently caters to automotive applications, domestic and international bike and e-bike OEMs.

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

The company acquired a strategic stake in Hewland, a British company in 2022, from Hero International B.V. which had been associated with Hewland since 2017. It entered into a joint venture with Yamaha Motors Japan in 2021 to manufacture electric motors under the ‘HYM’ brand which commenced operations in 2022. In 2023, it also ventured into the electric drive unit (“EDU”) segment for micro-mobility under the ‘ESYNC’ brand.

The company is a fully integrated powertrain systems provider offering comprehensive solutions including services for designing, prototyping, validating, developing, and delivering system-level and component-level powertrain solutions for both electric as well as non-electric powertrains.

According to a CRISIL report mentioned in the DRHP, the firm is among the first companies in India to capitalise on the global e-bike powertrain opportunity and has a distinct first mover advantage in this industry. It is the only player manufacturing and exporting CVT hubs to global e-bike OEMs from India, and is the only manufacturer of integrated electric powertrain products for e-bikes in India.

On the financial front, Hero Motors’ revenue from operations increased from ₹914.19 crore in FY22 to ₹1,064.39 crore in FY24. Revenue stood at ₹807.26 crore in the nine months ended December 31, 2024. Profit after tax (PAT) stood at ₹17.04 crore in FY24 and ₹22.39 crore in the nine months ended December 31, 2024.

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

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