Hero Motors refiles DRHP for Rs 1,200 crore IPO
Hero Motors refiles DRHP for Rs 1,200 crore IPO
South Asia Growth Invest backed Hero Motors, offering comprehensive solutions including services for designing, prototyping, validating, developing, and delivering system-level powertrain solutions for both electric as well as non-electric powertrains, has refiled its draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) to raise Rs 1,200 crore through an initial public offering (IPO).
The IPO with a face value of Rs 10 is a mix of fresh issue of up to Rs 800 Cr and an offer for sale up to Rs 400 Cr by promoters. The OFS includes Rs 390 crore worth shares by O P Munjal Holdings, and Rs 5 crore each by Bhagyoday Investments and Hero Cycles each.
Proceeds from the fresh issue of shares will be used to the extent of Rs 285 crore for repayment/prepayment/
The company, in consultation with the book-running lead managers, may consider a pre-IPO placement of Rs 160 crore. If such placement is completed, the amount will be reduced from the fresh issue.
The Offer is being made through the book-building process, wherein not more than 50% of the offer shall be available for allocation on a proportionate basis to qualified institutional buyers, and not less than 15% and 35% shall be available for allocation to non-institutional bidders and retail individual investors respectively.
Hero Motors is one of India’s leading automotive technology companies (Source: CRISIL Report) engaged in designing, developing, manufacturing and supplying highly engineered powertrain solutions catering to automotive original equipment manufacturers (“OEMs”) in United States, Europe, India and the Association of Southeast Asian Nations (“ASEAN”) region. It initially commenced its business operations with the manufacture of A&M components and currently cater to automotive applications, domestic and international bike and e-bike OEMs.
Its operations are organized into Powertrain Solutions; and Alloys and Metallics (“A&M”) business segments. The company is a fully integrated powertrain systems provider offering comprehensive solutions including services for designing, prototyping, validating, developing, and delivering system-level and component-level powertrain solutions for both electric as well as non-electric powertrains. Its offerings find application in two-wheelers, performance automotive, e-bikes, off-road vehicles, electric and hybrid cars, heavy duty vehicles, and electric vertical take-off and landing (“eVTOL”) categories. It caters to requirements of its global customers such as BMW AG (“BMW”), Ducati Motor Holding S.P.A. (“Ducati”), Enviolo International Inc (“enviolo”), Formula Motorsport Ltd (“Formula Motorsport”), HUMMINGBIRDEV Inc. (“Hummingbird EV”), HWA AG (“HWA”) and leading global electric bicycle (“e-bike”) manufacturers and other mobility applications such as aerospace.
It is among the first companies in India to capitalize on the global e-bike powertrain opportunity and have a distinct first mover advantage in this industry. It is the only player manufacturing and exporting CVT hubs to global e-bike OEMs from India, and are the only manufacturer of integrated electric powertrain products for e-bikes in India. (Source: CRISIL Report). It is among the few companies that address the requirements of the premium ICE and performance ICE segment that require high-performance transmission systems capable of handling tough torque needs while keeping components lightweight. (Source: CRISIL Report).
As of December 31, 2024, it operated six manufacturing facilities spread across India, United Kingdom and Thailand that are strategically located to ensure proximity to customers and cost competitiveness.
The company acquired a strategic stake in Hewland, a British company in 2022, from Hero International B.V. which had been associated with Hewland since 2017. It entered into a joint venture with Yamaha Motors Japan in 2021 to manufacture electric motors under the ‘HYM’ brand which commenced operations in 2022. In 2023, it also ventured into the electric drive unit (“EDU”) segment for micro-mobility under the ‘ESYNC’ brand.
Hero Motors’ revenue from operations increased from ₹ 914.19 crore in Fiscal 2022 to ₹ 1,064.39 crore in Fiscal 2024 and was ₹807.26 crore in the nine months ended December 31, 2024. Further, Gross Profit increased from ₹ 281.38 crore in Fiscal 2022 to ₹ 419.37 crore in Fiscal 2024 at a CAGR of 22.08% and was ₹330.47 crore in the nine months ended December 31, 2024, while profit after tax stood at ₹17.04 crore in Fiscal 2024 and was ₹22.39 crore in the nine months ended December 31, 2024.
ICICI Securities Limited, DAM Capital Advisors Limited, and JM Financial Limited are the book-running lead managers to the issue and KFin Technologies Limited is the registrar to the offer.
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