Hero Motors refiles papers for IPO, raises issue size to Rs 1,200 crore

Auto components maker Hero Motors has refiled its Draft Red Herring Prospectus (DRHP) with markets regulator SEBI for an initial public offering (IPO), increasing the issue size from Rs 900 crore to Rs 1,200 crore.

The company plans to issue fresh shares worth up to Rs 800 crore, while its existing shareholders will sell shares worth up to Rs 400 crore, according to the draft prospectus.

Hero Motors, which counts BMW and Ducati among its clients, is led by Pankaj Munjal, a member of the Munjal family that runs Hero MotoCorp, India’s largest two-wheeler manufacturer by volume.

Proceeds from the IPO will be used to reduce debt and fund the purchase of equipment to expand its facility in Uttar Pradesh, Hero Motors said.

Earlier, in August last year, the company had filed papers for a Rs 900 crore IPO.

As of now, the promoters hold a 91.65% stake in the company.

Hero Motors manufactures engine and transmission components for two-wheelers and has a global clientele that includes brands such as BMW, Ducati, and Harley-Davidson.

In FY24, 49% of the company’s revenue came from powertrain solutions, while the remaining 51% came from the alloys and metallics (A&M) business segment.

Geographically, about 59% of FY24 revenue was derived from India, 29% from Europe, and around 8% from the US. The company’s revenue from operations grew from Rs 914.2 crore in FY22 to Rs 1,064.4 crore in FY24. Meanwhile, gross profit rose from Rs 281.4 crore in FY22 to Rs 419.4 crore in FY24, at a CAGR of 22%, with gross margins improving from 30.78% in FY22 to 39.40% in FY24.