Hero Motors Limited Files DRHP for ₹12,000 Crore IPO, Eyeing Expansion in Powertrain and EV Solutions
By Ankur Chandra | Published at: Jul 1, 2025 09:02 AM IST
New Delhi, July 1, 2025: Hero Motors Limited, a prominent entity within the Munjal Group, has officially submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO) valued at ₹12,000 crore. This significant public offering will comprise a fresh equity issue of ₹8,000 crore and an offer for sale (OFS) of ₹4,000 crore by existing promoters and promoter group entities.
The proposed IPO is structured as a 100% book-built issue and is intended for listing on both the National Stock Exchange (NSE) and BSE.
Hero Motors IPO Details
| IPO Component | Details |
|---|---|
| Total Issue Size | ₹12,000 crore |
| Fresh Issue | ₹8,000 crore |
| Offer for Sale (OFS) | ₹4,000 crore |
| Face Value | ₹10 per share |
| Listing Exchanges | NSE and BSE |
| IPO Route | 100% Book Building (Reg 6(1)) |
Note: Hero Motors may explore a pre-IPO placement of up to ₹1,600 crore before filing the RHP.
Hero Motors OFS Breakdown by Promoters
| Selling Shareholder | OFS Value (₹ Cr) | Cost of Acquisition (₹/share) |
|---|---|---|
| O P Munjal Holdings | ₹3,900 crore | ₹0.03 |
| Bhagyoday Investments Pvt Ltd | ₹50 crore | ₹0.26 |
| Hero Cycles Ltd | ₹50 crore | ₹10.07 |
Utilisation of Fresh Issue Proceeds
| Use of Funds | Estimated Amount (₹ Cr) |
|---|---|
| Repayment of certain borrowings | ₹285.00 |
| Capex at the Gautam Buddha Nagar facility | ₹237.00 |
| Inorganic growth & general corporate purposes | [To be finalized] |
Capex and strategic initiatives will not exceed 35% of the gross proceeds.
Shareholding Structure: Before and After IPO
| Category | Shares Held | % Pre-Offer Equity |
|---|---|---|
| Promoters | 28.41 crore | 73.97% |
| Promoter Group | 4.34 crore | 11.28% |
| Total Selling Shareholders | 30.48 crore | 79.35% |
Hero Motors Financial Performance (Consolidated)
| Metric | 9M FY25 | FY24 | FY23 | FY22 |
|---|---|---|---|---|
| Revenue from Operations (₹ Cr) | 807.27 | 1,064.39 | 1,054.62 | 914.19 |
| Adjusted EBITDA (₹ Cr) | 86.49 | 122.27 | 110.70 | 102.19 |
| Net Profit (₹ Cr) | 22.39 | 17.04 | 40.51 | 99.02 |
| EBITDA Margin (%) | 9.34% | 7.78% | 9.23% | 18.37% |
IPO Lead Managers and Registrar
- ICICI Securities Limited
- DAM Capital Advisors Ltd
- JM Financial Ltd
- Registrar: KFin Technologies Ltd
What’s Next for Hero Motors Limited?
Hero Motors’ ₹12,000 crore IPO marks a major step toward unlocking value and strengthening its financial base. The ₹8,000 crore fresh issue will aid debt repayment, capacity expansion, and strategic investments. Despite moderate profitability in recent years, improved EBITDA margins in 9M FY25 reflect operational efficiency. With SEBI approval pending, a pre-IPO placement of ₹1,600 crore is likely before final pricing and launch. Listing on NSE and BSE is expected in the coming months.
About Hero Motors Limited
Hero Motors Limited, headquartered in Ludhiana, Punjab, is a flagship entity of the Munjal Group. The company offers cutting-edge powertrain solutions for both electric and internal combustion mobility. Hero Motors operates in two key verticals: Powertrain Solutions and Alloy & Metallic Components.
Its manufacturing footprint spans India, the United Kingdom, and Thailand, with six production facilities and two advanced R&D centres. Hero Motors serves prominent global clients such as BMW AG, Hero MotoCorp, Ducati, Enviolo, and HWA AG.
The IPO is subject to regulatory approvals and prevailing market conditions. Price band, bid dates, and allocation schedule will be disclosed in the Red Herring Prospectus (RHP).
REF: https://www.bseindia.com/corporates/download/355016/IPO Prior/Hero_Motors_Limited_DRHP_20250630232917.pdf
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