Hero Motors IPO To Open On September 16; Price Band Fixed At Rs 79-84 A Share

Hero Motors IPO: Hero Motors Ltd, an automotive technology and powertrain solutions company, on Thursday said it will launch its initial public offering (IPO) on September 16, with the price band fixed at Rs 79-84 per equity share.

The IPO will remain open for subscription until September 18. Investors can bid for a minimum of 178 shares and in multiples thereof.

The maiden public issue comprises a fresh issue of shares worth up to Rs 600 crore and an offer for sale (OFS) of shares worth up to Rs 400 crore by promoters O P Munjal Holdings and Hero Cycles Ltd, taking the total issue size to Rs 1,000 crore.

At the upper end of the price band, the company will offer 4.76 crore shares under the OFS, while 5.06 crore shares will be offered at the lower

end.

Of the proceeds from the fresh issue, Rs 190 crore will be used to repay, prepay or redeem certain outstanding borrowings. Another Rs 200 crore will be deployed towards capital expenditure, including the purchase of equipment for capacity expansion at the company’s facility in Gautam Buddha Nagar, Uttar Pradesh.

The company also plans to use a portion of the proceeds to fund unidentified acquisitions and other strategic initiatives, besides general corporate purposes.

Hero Motors is an automotive technology company that designs, develops, manufactures and supplies powertrain solutions to automotive original equipment manufacturers (OEMs) across the US, Europe, India and the ASEAN region, according to a CRISIL report cited in the company’s release.

The company provides integrated powertrain solutions spanning design, prototyping, validation, development and delivery of system-level and component-level solutions for both electric and internal combustion engine (ICE) powertrains.

Its products are used across two-wheelers, performance automobiles, e-bikes, off-road vehicles, electric and hybrid cars, heavy-duty vehicles and electric vertical take-off and landing (eVTOL) applications.

Its customers include BMW AG, Ducati Motor Holding, Enviolo International, Formula Motorsport, Hummingbird EV and HWA AG, besides global electric bicycle manufacturers and customers in other mobility segments.

Hero Motors has a presence in the premium ICE and performance ICE segment, where vehicles require high-performance transmission systems capable of handling high torque while keeping components lightweight, the company said, citing the CRISIL report.

The company has invested in in-house design and engineering capabilities and technology partnerships with global players. It is known for developing and manufacturing continuously variable transmissions (CVTs), EV transmissions, electric motors, integrated drive units and gear sets.

ICICI Securities, DAM Capital Advisors and JM Financial are the book-running lead managers for the issue, while KFin Technologies is the registrar.

Under the IPO’s book-building structure, up to 50% of the net offer will be available for allocation to qualified institutional buyers. At least 15% will be reserved for non-institutional investors, while retail investors will be allocated not less than 35% of the net offer.