Hero Motors Refiles IPO Papers for Rs 1,200 Crore Public Offering

Hero Motors has refiled its Draft Red Herring Prospectus with the Securities and Exchange Board of India for a Rs 1,200 crore initial public offering, marking an increase from its earlier proposed issue size of Rs 900 crore filed in August 2024.

The IPO comprises a fresh issue of up to Rs 800 crore and an offer for sale of up to Rs 400 crore by promoters. The offer for sale component includes shares worth Rs 390 crore from O P Munjal Holdings and Rs 5 crore each from Bhagyoday Investments and Hero Cycles.

The company plans to use Rs 285 crore from the fresh issue to repay or prepay outstanding borrowings, while Rs 237 crore will fund capacity expansion at its Gautam Buddha Nagar facility in Uttar Pradesh. Hero Motors also intends to utilize funds for inorganic growth through acquisitions and general corporate purposes.

Hero Motors, led by Pankaj Munjal, operates in the auto components sector and counts BMW and Ducati among its clients. Pankaj Munjal belongs to the Munjal family that runs Hero MotoCorp, India's largest two-wheeler manufacturer by volumes.

The company previously withdrew its Rs 900 crore IPO papers in October 2024 after filing them with SEBI in August 2024. The earlier proposal included a fresh issue of Rs 500 crore and an offer for sale component of Rs 400 crore.

Hero Motors reported a 67 percent decline in net profit for fiscal year 2024, as increased expenses offset a near-1 percent rise in revenue. The company's revenue from operations stood at Rs 1,064.4 crore in fiscal 2024.

The refiling represents the company's renewed attempt to access public markets after its earlier withdrawal, with the increased issue size reflecting revised funding requirements for debt reduction and expansion plans.