“Hero Motors Ups IPO Size to Rs 1,200 Crore: Fresh Issue, OFS & Expansion Plans Unveiled”
Hero Motors has raised its IPO size from Rs 900 cr to Rs 1,200 cr via SEBI refiling, with Rs 800 cr new shares and Rs 400 cr OFS. Funds to reduce debt and expand UP plant, backed by strong revenue growth
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Hero Motors, the Pankaj Munjal-led auto-parts manufacturer supplying to brands like BMW and Ducati, has officially refiled its Draft Red Herring Prospectus (DRHP) with SEBI, increasing its IPO size from Rs 900 crore to Rs 1,200 crore.
IPO Breakdown:
Fresh issue: Up to Rs 800 crore in new shares.
Offer for sale (OFS): Up to Rs 400 crore, with Rs 390 crore by O P Munjal Holdings, and ₹5 crore each by Bhagyoday Investments and Hero Cycles.
Purpose of proceeds:
Debt repayment: Rs 285 crore earmarked to reduce borrowings.
Capacity expansion: Rs 237 crore for new equipment at the Uttarakhand plant in Gautam Buddha Nagar, Uttar Pradesh.
Strategic uses: Remaining funds to be used for acquisitions and general corporate purposes.
Company snapshot:
Hero Motors saw its FY 2024 revenue climb from Rs 914.2 crore (FY 22) to Rs 1,064.4 crore (FY 24), while gross profit soared from Rs 281.4 crore to Rs 419.4 crore—a 22 % CAGR.
Net profit dipped 67 % in FY 24, dragged down by higher expenses despite stable revenues.
The promoters currently hold a 91.65 % stake.
The firm operates six manufacturing units across India, the UK, and Thailand; nearly 60 % revenue domestically, with remaining from Europe (29 %) and the US (8 %).
IPO structure & management:
The shares carry a Rs 10 face value and will follow a book-building process: min. 50 % for QIBs, 15 % for NIIs, and 35 % for retail investors.
ICICI Securities, JM Financial, and DAM Capital serve as book-running lead managers, with KFin Technologies as registrar.
