Hero Motors, the flagship auto components company of the Hero Motors Company Group and leading automotive technology companies, has filed a draft red herring prospectus with SEBI to raise ₹900 crore through an initial public offering.
The IPO will consist of fresh issue of ₹500 crore and an offer for sale up to ₹400 crore by promoters. The OFS includes ₹250 crore worth shares by OP Munjal Holdings and ₹75 crore each by Bhagyoday Investments and Hero Cycles.
The company may consider a pre-IPO placement of ₹100 crore. Of the proceeds from the fresh issue, about ₹200 crore will be used to repay debt, ₹124 crore for funding capital expenditure towards purchase of equipment for expansion in Uttar Pradesh besides general corporate purposes.
Hero Motors specialises in designing, developing, manufacturing and supplying advanced powertrain solutions to automotive OEMs across the United States, Europe, India, and the ASEAN region.
The company operates in two key segments: powertrain solutions and alloys and metallics. Hero Motors has established six manufacturing facilities located in India, the United Kingdom, and Thailand.
The company is the sole Indian manufacturer and exporter of CVT hubs to global e-bike OEMs and the only producer of integrated electric powertrain products for e-bikes within the country.
Revenue
The company’s revenue increased 1 per cent last fiscal to ₹1,064 crore against ₹1,055 crore in FY23.
Since 2019, Hero Motors has been securing contracts from European two-wheeler OEMs for the production of complete gearbox systems and has also ventured into the micro-mobility sector by supplying CVT systems.
In 2022, Hero Motors acquired a strategic stake in the British company Hewland from Hero International BV, which had been associated with Hewland since 2017. In 2021, the company entered into a joint venture with Yamaha Motors Japan to manufacture electric motors under the ‘HYM’ brand, with operations commencing in 2022. Additionally, in 2023, Hero Motors acquired STPL, a company specialising in the production of components for high-end bikes and e-bikes.