Hero Motors, an auto component maker, has withdrawn its draft red herring prospectus (DRHP) filed with market regulator SEBI for a ₹900 crore initial public offering (IPO).
In August, Pankaj Munjal’s Hero Motors had filed preliminary papers for a ₹900 crore IPO that comprised fresh issues of shares at ₹500 crore, and an offer for sale (OFS) at ₹400 crore.
Under the OFS, OP Munjal Holdings was offloading shares worth ₹250 crore while Bhagyoday Investments and Hero Cycles were selling shares worth ₹75 crore each.
Pankaj Munjal is a first cousin of Hero MotoCorp’s chairman Pawan Munjal.
Without disclosing the reason, a SEBI update on Monday on the processing status of draft offer documents showed “DRHP withdrawn on October 5”.
In the DRHP, Hero Motors had said that it will utilise net proceeds from the fresh issue towards clearing outstanding debt, capital expenditure through the purchase of equipment required for expansion in capacity of the Noida facility, funding working capital requirements and general corporate purposes.
Hero Motors revenues had gone up from ₹914 crore in FY22 to ₹1,064 crore in FY24. The company’s gross profit had surged from ₹281 crore in FY22 to ₹419 crore in FY24. Currently, the promoters of the company own a 91.65 per cent stake.