Hero Motors Secures Nearly ₹300 Crore from Anchor Investors at ₹84 Per Share Ahead of ₹1,000-Crore IPO

Auto technology and powertrain components manufacturer Hero Motors Limited has successfully raised ₹299.99 crore from anchor investors, completing the round just ahead of opening its ₹1,000-crore initial public offering (IPO) for public subscription.

According to an exchange disclosure filed on the BSE, the company's IPO committee allocated 3,57,14,284 equity shares to 24 institutional investors at the upper end of the price band at ₹84 per share. The price band for the public offer has been fixed at ₹79 to ₹84 per equity share.

Strong Domestic Institutional Participation

Domestic mutual funds emerged as the dominant buyers, picking up approximately 81.66% of the anchor book, or 2.91 crore equity shares, through 16 schemes managed across leading fund houses.

Key institutional participants in the anchor round included:

• 3P India Equity Fund 1M (managed by Prashant Jain)
• ICICI Prudential Life Insurance Company Ltd and ICICI Prudential Mutual Fund
• Edelweiss Life Insurance Company Ltd
• Kotak Mahindra Mutual Fund
• JM Financial Mutual Fund
• Bank of India Mutual Fund
• Societe Generale – ODI
• ASAS Global Fund Incorporated VCC Sub Fund

Offer Structure and Financial Objectives

The ₹1,000-crore public issue comprises a fresh issue of equity shares worth up to ₹600 crore and an offer-for-sale (OFS) of shares worth up to ₹400 crore by the promoter selling shareholders. Under the OFS, promoter entity O P Munjal Holdings is divesting shares worth ₹395 crore, while Hero Cycles Limited is offloading shares worth ₹5 crore.

Hero Motors plans to deploy the net proceeds of the fresh issue towards strengthening its balance sheet and expanding operational capacity:

• Debt Reduction: Approximately ₹190 crore will be allocated toward the repayment, prepayment, or redemption of certain outstanding borrowings.
• Capacity Expansion: ₹200 crore will be invested to fund the procurement of plant and machinery for expanding its manufacturing facility located in Gautam Buddha Nagar, Uttar Pradesh.
• Growth and Corporate Purposes: The remaining capital is earmarked for inorganic growth via strategic acquisitions, operational initiatives, and general corporate purposes.

Following the completion of the IPO, promoter shareholding will dilute from roughly 85.6% down to approximately 61.1% to 61.6%.

Business Profile and Performance

Led by Pankaj Munjal, Hero Motors operates in the precision automotive engineering space, designing and manufacturing powertrain solutions, automotive gears, transmission systems, and metallic assemblies. The company caters to top-tier global vehicle manufacturers and electric mobility brands, including BMW AG, Ducati Motor Holding, Enviolo International, and Hummingbird EV.

For the financial year ended March 31, 2026, Hero Motors posted consolidated revenue from operations of ₹1,216.74 crore, marking a 9% increase over ₹1,111.23 crore in FY25. Profit after tax (PAT) grew 26% year-on-year to ₹41.17 crore compared to ₹32.80 crore in the preceding year, while EBITDA rose to ₹147.78 crore.

The book-running lead managers to the issue are ICICI Securities, DAM Capital Advisors, and JM Financial, while KFin Technologies is acting as the registrar. The equity shares will be listed on both the BSE and the National Stock Exchange of India (NSE).

Tags: Hero Motors BSE NSE Auto Components Initial Public Offering