After Ola Electric, another company in the auto sector has started preparing to bring an IPO. For thisHero Motors, the auto component firm of Hero Motors Company (HMC) Group, has also submitted the draft to market regulator SEBI. The company wants to raise Rs 900 crore through this Initial Public Offer i.e. IPO. According to the Draft Red Herring Prospectus (DRHP), under this IPO, the company will issue a fresh issue of Rs 500 crore. At the same time, an Offer for Sale i.e. OFS of Rs 400 crore by the promoters will be included. Under OFS, the promoters of the company will sell their shares. According to the information, Hero Motors, a company of South Asia Growth Invest, has sent the draft to SEBI on 23 August.
Details related to IPO
In this issue, Hero Motors promoters OP Munjal Holdings will sell shares worth Rs 250 crore through OFS. Apart from this, Bhagyodaya Investments and Hero Cycles will sell shares worth Rs 75-75 crore. The company can raise Rs 100 crore before the IPO, and if this happens, the size of the fresh issue will be reduced.
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Of the Rs 202 crore raised from the fresh issue, Rs 124 crore will be used to repay debt, Rs 124 crore will be used to purchase equipment required to expand the capacity of the company’s facility in Gautam Buddha Nagar, Uttar Pradesh. The remaining amount will be used for general corporate purposes. ICICI Securities Limited, DAM Capital Advisors Limited and JM Financial Limited are the book-running lead managers for the IPO.
About the Company
Hero Motors specializes in advanced powertrain solutions for automotive OEMs globally, including the US, Europe, India and ASEAN. Its product portfolio ranges from two-wheelers to heavy-duty vehicles and eVTOLs The vehicles include both electric and fuel versions up to 2000 cc. The company operates in two segments. Which includes powertrain, alloy and metal segments. The company works with 6 manufacturing facilities in the UK, Thailand and across the country.
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Hero Motors’ revenue grew 0.9% to Rs 1,064.4 crore during FY 2023-24. The company has recently expanded its international footprint through strategic acquisitions and joint ventures, including a stake in British company Hewland and a partnership with Yamaha Motors Japan.
