Hero Motors withdraws papers for Rs 900-crore IPO

Pankaj Munjal-led auto component maker Hero Motors Ltd has withdrawn its draft red herring prospectus (DRHP) for the Rs 900-crore initial public offering (IPO) filed with the market regulator in August.

The Noida-based powertrain solutions provider had plans to raise Rs 500 crore through a fresh issue of shares while its promoter and promoter groups were looking at Rs 400 crore through the offer-for-sale component.

The DRHP was withdrawn on October 5, according to the processing status of draft offer documents from the Securities and Exchange Board of India. The reason for withdrawal has not been disclosed.

Hero Motors provides integrated powertrain systems, offering solutions for designing, prototyping, validating, developing, and delivering system-level powertrain solutions for electric and non-electric vehicles. Its offerings include motor and electric drive units for e-bikes.

Some of its customers include Hero MotoCorp, Escorts Kubota, Ducatti and Hummingbird. The company has six manufacturing facilities and two technology centers across India, UK, and Thailand.

Hero MotoCorp has a joint venture, HYM Drive Systems Pvt Ltd, with Yamaha Motor and has recently bought Spur Technologies Pvt Ltd, which makes alloys and metallics components.

Promoter OP Munjal Holdings, which holds a 72% stake in the company, was planning to sell shares worth up to Rs 250 crore, while promoter group Hero Cycles and Bhagyoday Investments planned to sell shares worth up to Rs 75 crore each.

Hero Motor was planning to use the net proceeds of Rs 500 crore from the fresh issue primarily to repay debt and fund the capex for the purchase of equipment for capacity expansion at its Noida facility.

The company's net profit for the financial year 2024 stood at Rs 17 crore, down from Rs 40.5 crore in 2022-23. Revenue from operations was at Rs 1,064.4 crore, slightly higher than Rs 1,054.62 crore in the year-ago period. Its total cash and cash equivalent in 2023-24 was Rs 42.3 crore.