IPO Watch: Hero Motors refiles draft papers for ₹1,200 crore IPO

IPO Watch: Hero Motors has refiled its draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) to raise ₹1,200 crore through an initial public offering (IPO).

Hero Motors provides a wide range of solutions, including design, prototyping, validation, development, and delivery of system-level powertrain solutions for both electric and non-electric powertrains. It is one of the pioneering companies in India to seize the global e-bike powertrain market opportunity, granting it a significant first-mover advantage in this sector.

As of December 31, 2024, the company operated six manufacturing facilities across India, the United Kingdom, and Thailand, strategically positioned to ensure proximity to customers and maintain cost-effectiveness.

Hero Motors’ operational revenue rose from ₹914.19 crore in fiscal 2022 to ₹1,064.39 crore in fiscal 2024, with ₹807.26 crore recorded in the nine months leading up to December 31, 2024.

Additionally, gross profit improved from ₹281.38 crore in fiscal 2022 to ₹419.37 crore in fiscal 2024, with a compound annual growth rate (CAGR) of 22.08%, and was ₹330.47 crore in the nine months ended December 31, 2024. Meanwhile, profit after tax amounted to ₹17.04 crore in fiscal 2024 and reached ₹22.39 crore in the nine months concluded on December 31, 2024.

The initial public offering (IPO) has a face value of ₹10 and comprises a fresh issue of stocks valued at up to ₹800 crore in addition to an offer for sale (OFS) up to ₹400 crore by the promoters. The OFS includes shares worth ₹390 crore from O P Munjal Holdings and ₹5 crore each from Bhagyoday Investments and Hero Cycles.

The funds raised from the fresh issue of shares will be allocated as follows: ₹285 crore for the repayment, prepayment, or full or partial redemption of certain outstanding borrowings of the Company; ₹237 crore for capital expenses related to purchasing equipment necessary for expanding the capacity of its facility in Gautam Buddha Nagar, Uttar Pradesh; for funding potential acquisitions and other strategic initiatives; and for general corporate purposes.

ICICI Securities Limited, DAM Capital Advisors Limited, and JM Financial Limited serve as the book-running lead managers for the issue, while KFin Technologies Limited acts as the registrar for the offer.

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